I

103D CONGRESS

2D SESSION H. R. 5278

To provide for the creation of jobs in America, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 7, 1994

Mr. SANDERS (for himself, Ms. VELA ́ZQUEZ, Mr. HINCHEY, Mr. OWENS, Mr.

BONIOR, and Mr. BROWN of California) introduced the following bill;

which was referred jointly to the Committees on Public Works and Transportation, Energy and Commerce, Armed Services, Appropriations, Banking, Finance and Urban Affairs, Education and Labor, Natural Resources, and Ways and Means

A BILL

To provide for the creation of jobs in America, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘The Jobs and Investment Act of 1994’’.

6 (b) TABLE OF CONTENTS.—

Sec. 1. Short title.

TITLE I—PHYSICAL CAPITAL INVESTMENT

Subtitle A—Highways and Mass Transit

Sec. 1001. Highway programs.
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Sec. 1002. Federal transit act programs.

Subtitle B—Airports

Sec. 1101. Airport improvement program.

Subtitle C—Railroads

Sec. 1201. Local rail freight assistance.

Subtitle D—Water and Sewage Treatment Facilities

Sec. 1301. State water pollution control revolving funds.

Subtitle E—Environmental Restoration

Sec. 1401. Environmental restoration at facilities of the department of defense

and department of energy.

Subtitle F—Community Development Assistance

CHAPTER 1—COMMUNITY DEVELOPMENT BLOCK GRANTS

Sec. 1501. Authorization of appropriations.

CHAPTER 2—COMMUNITY BANKING AND ECONOMIC EMPOWERMENT ACT

Sec. 1511. Short title.

Sec. 1512. Authority of secretary.

Sec. 1513. Eligible community development lenders.

Sec. 1514. Capital and operating assistance for community development lenders.

Sec. 1515. Requirements of assisted community development lenders.

Sec. 1516. Application and approval for assistance.

Sec. 1517. Assistance agreements.

Sec. 1518. Books, records, and audits.

Sec. 1519. Technical assistance for organizing and operating community development lenders.

Sec. 1520. Relationship to community reinvestment act of 1977.

Sec. 1521. Reports to congress.

Sec. 1522. Regulations.

Sec. 1523. Definitions.

Sec. 1524. Authorization of appropriations.

Subtitle G—Education Infrastructure

Sec. 1601. Short title.

Sec. 1602. Findings.

Sec. 1603. Purpose.

Sec. 1604. Definitions.

Sec. 1605. Improvement of public elementary and secondary education facilities

program authorized.

Sec. 1606. Applications.

Sec. 1607. Authorized activities.

Sec. 1608. Requirements.

Sec. 1609. Contracts.

Sec. 1610. Technical assistance.

Sec. 1611. Federal assessment.
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Subtitle H—Renewable Energy and Energy Efficiency

Sec. 1701. Renewable energy.

Sec. 1702. Energy efficiency.

TITLE II—HUMAN CAPITAL INVESTMENT

Subtitle A—Job Training

Sec. 2001. Human capital investments in job training.

Subtitle B—Education

Sec. 2101. Educational personnel.

Subtitle C—Head Start

Sec. 2201. Amendments to the Head Start act.

Subtitle D—Programs Under Public Health Service Act

CHAPTER 1—FUNDING INITIATIVE FOR PROGRAMS PROVIDING HEALTH

SERVICES

Sec. 2301. Funding initiative.

CHAPTER 2—COMMUNITY HEALTH ADVISOR PROGRAM

Sec. 2311. Short title.

Sec. 2312. Findings.

Sec. 2313. Formula grants regarding community health advisor programs.

Sec. 2314. Requirements regarding community health advisor programs.

Sec. 2315. Additional agreements.

Sec. 2316. Application for assistance; State plan.

Sec. 2317. Determination of amount of allotment.

Sec. 2318. Quality assurance; cost-effectiveness.

Sec. 2319. Evaluations; technical assistance.

Sec. 2320. Rule of construction regarding programs of indian health service.

Sec. 2321. Definitions.

Sec. 2322. Funding.

TITLE III—AMENDMENTS OF INTERNAL REVENUE CODE OF 1986

Subtitle A—Reduction in Employee Payroll Taxes; Credit for First-Time

Homebuyers

Sec. 3001. Credit for portion of social security taxes.

Sec. 3002. Credit for purchase of principal residence by first-time homebuyer.

Subtitle B—Revenue Increases

Sec. 3101. Stock transfer excise tax.

Sec. 3102. Repeal of preferential rate of tax on capital gains.

Sec. 3103. Carryover basis at death.

Sec. 3104. Miscellaneous amendments related to carryover basis.

TITLE IV—APPROPRIATIONS

Sec. 4001. Appropriations.

Sec. 4002. Designation as emergency requirement.
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1 TITLE I—PHYSICAL CAPITAL

2 INVESTMENT

3 Subtitle A—Highways and Mass

4 Transit

5 SEC. 1001. HIGHWAY PROGRAMS.

6 (a) Section 1003 of the Intermodal Surface Trans7 portation Efficiency Act of 1991 (105 Stat. 1918–1922)

8 is amended by adding at the end the following:

9 ‘‘(d) ADDITIONAL FUNDING FROM HTF.—In addi10 tion to amounts made available by subsection (a), for the

11 purpose of carrying out the provisions of title 23, United

12 States Code, the following sums are authorized to be ap13 propriated out of the Highway Trust Fund (other than

14 the Mass Transit Account):

15 ‘‘(1) INTERSTATE MAINTENANCE PROGRAM.—

16 For the interstate maintenance program

17 $3,500,000,000 for each of fiscal years 1995 and

18 1996.

19 ‘‘(2) SURFACE TRANSPORTATION PROGRAM.—

20 For the surface transportation program

21 $3,000,000,000 for each of fiscal years 1995 and

22 1996.

23 ‘‘(3) BRIDGE PROGRAM.—For the bridge pro24 gram $3,500,000,000 for each of fiscal years 1995

25 and 1996.’’.
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1 (b) NON-APPLICABILITY OF OBLIGATION CEILING.—

2 Funds authorized by the amendment made by subsection

3 (a) shall not be subject to any obligation limitation.

4 SEC. 1002. FEDERAL TRANSIT ACT PROGRAMS.

5 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

6 21 of the Federal Transit Act (49 U.S.C. App. 1617) is

7 amended by adding at the end the following:

8 ‘‘(h) ADDITIONAL FUNDING.—

9 ‘‘(1) FORMULA GRANT PROGRAMS.—

10 ‘‘(A) FROM THE TRUST FUND.—There

11 shall be available from the Mass Transit Ac12 count of the Highway Trust Fund to carry out

13 section 18 of this Act $125,000,000 for each of

14 fiscal years 1995 and 1996. Such sums shall re15 main available until expended.

16 ‘‘(B) FROM GENERAL FUNDS.—There are

17 authorized to be appropriated to carry out sec18 tion 9 of this Act $825,000,000 for each of fis19 cal years 1995 and 1996. Such sums shall re20 main available until expended.

21 ‘‘(2) SECTION 3 DISCRETIONARY AND FORMULA

22 GRANTS.—There shall be available from the Mass

23 Transit Account of the Highway Trust Fund only to

24 carry out section 3 of this Act $650,000,000 for
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1 each of fiscal years 1995 and 1996. Such sums shall

2 remain available until expended.’’.

3 (b) CONTRACT AUTHORITY.—Section 21(b)(4) of

4 such Act is amended—

5 (1) by striking ‘‘or (b)(3)’’ and inserting

6 ‘‘(b)(3), (h)(1)(A), or (h)(2)’’; and

7 (2) by striking ‘‘or (b)(2)’’ and inserting ‘‘,

8 (b)(2), or (h)(1)(B)’’.

9 (c) NON-APPLICABILITY OF OBLIGATION CEILING.—

10 Funds authorized by the amendment made by subsection

11 (a) shall not be subject to any obligation limitation.

12 Subtitle B—Airports

13 SEC. 1101. AIRPORT IMPROVEMENT PROGRAM.

14 (a) FUNDING.—Section 505(a) of the Airport and

15 Airway Improvement Act of 1982 (49 U.S.C. App.

16 2204(a)) is amended by inserting after the second sen17 tence the following: ‘‘In addition to amounts made avail18 able by the preceding sentence, there shall be available to

19 the Secretary for such grants (including grants for airport

20 noise compatibility planning under such Act) and for car21 rying out noise compatibility programs or parts thereof

22 under such section 104(c) $1,000,000,000 for each of fis23 cal years 1995 and 1996.’’.
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1 (b) OBLIGATION AUTHORITY.—Section 505(b) of

2 such Act is amended by striking ‘‘1993’’ and inserting

3 ‘‘1996’’.

4 Subtitle C—Railroads

5 SEC. 1201. LOCAL RAIL FREIGHT ASSISTANCE.

6 Section 5(q) of the Department of Transportation

7 Act (49 U.S.C. App. 1654(q)) is amended—

8 (1) by striking ‘‘and $30,000,000 for fiscal year

9 1994’’ and inserting in lieu thereof ‘‘$30,000,000

10 for fiscal year 1994, $1,000,000,000 for fiscal year

11 1995, and $1,000,000,000 for fiscal year 1996’’;

12 and

13 (2) by striking ‘‘after September 30, 1994’’ and

14 inserting in lieu thereof ‘‘after September 30,

15 1996’’.

16 Subtitle D—Water and Sewage

17 Treatment Facilities

18 SEC. 1301. STATE WATER POLLUTION CONTROL REVOLV19 ING FUNDS.

20 Section 607 of the Federal Water Pollution Control

21 Act (33 U.S.C. 1387) is amended—

22 (1) by striking ‘‘and’’ at the end of paragraph

23 (4);

24 (2) by striking the period at the end of para25 graph (5) and inserting a semicolon; and
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1 (3) by adding at the end the following:

2 ‘‘(6) $4,000,000,000 for fiscal year 1995; and

3 ‘‘(7) $4,000,000,000 for fiscal year 1996.’’.

4 Subtitle E—Environmental

5 Restoration

6 SEC. 1401. ENVIRONMENTAL RESTORATION AT FACILITIES

7 OF THE DEPARTMENT OF DEFENSE AND DE8 PARTMENT OF ENERGY.

9 (a) AUTHORIZATION OF APPROPRIATIONS.—

10 (1) DEPARTMENT OF DEFENSE.—There is

11 hereby authorized to be appropriated to the Sec12 retary of Defense for each of fiscal years 1995 and

13 1996 for environmental restoration the following:

14 (A) $1,000,000,000, for deposit into the

15 Defense Environmental Restoration Account es16 tablished in section 2703 of title 10, United

17 States Code.

18 (B) $1,000,000,000, for deposit into the

19 Department of Defense Base Closure Account

20 1990 established in section 2906(a) of the Na21 tional Defense Authorization Act for Fiscal

22 Year 1991 (Public Law 101–510; 10 U.S.C.

23 2687 note), of which—

24 (i) $500,000,000 shall be used to

25 carry out environmental restoration activi-
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1 ties at military installations selected in

2 1993 for closure or realignment under the

3 Defense Base Closure and Realignment

4 Act of 1990 (part A of title XXIX of Pub5 lic Law 101–510; 10 U.S.C. 2687 note);

6 and

7 (ii) $500,000,000 shall be used to

8 carry out environmental restoration activi9 ties at military installations selected in

10 1995 for closure or realignment under

11 such Act.

12 (2) DEPARTMENT OF ENERGY.—There is ap13 propriated to the Secretary of Energy for each of

14 fiscal years 1995 and 1996 for environmental res15 toration and waste management at defense nuclear

16 facilities the following:

17 (A) $1,000,000,000, for environmental res18 toration.

19 (B) $750,000,000, for waste management.

20 (C) $250,000,000, for corrective activities.

21 (b) APPROPRIATIONS FOR FISCAL YEAR 1995.—The

22 following sums are appropriated, out of any money in the

23 Treasury not otherwise appropriated, for the fiscal year

24 ending September 30, 1995, to implement the provisions

25 of this Act, namely:
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1 DEPARTMENT OF DEFENSE

2 OPERATION AND MAINTENANCE

3 ENVIRONMENTAL RESTORATION, DEFENSE

4 For the Department of Defense, for deposit into the

5 Defense Environmental Restoration Account established

6 in section 2703 of title 10, United States Code,

7 $1,000,000,000, to remain available until transferred.

8 MILITARY CONSTRUCTION

9 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART II

10 For deposit into the Department of Defense Closure

11 Account 1990 established by section 2906(a) of the Na12 tional Defense Authorization Act for Fiscal Year 1991

13 (Public Law 101–510; 10 U.S.C. 2687 note),

14 $500,000,000, to be available solely for environmental res15 toration and to remain available until expended.

16 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART III

17 For deposit into the Department of Defense Closure

18 Account 1990 established by section 2906(a) of the Na19 tional Defense Authorization Act for Fiscal Year 1991

20 (Public Law 101–510; 10 U.S.C. 2687 note),

21 $500,000,000, to be available solely for environmental res22 toration and to remain available until expended.
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1 DEPARTMENT OF ENERGY

2 DEFENSE ENVIRONMENTAL RESTORATION AND WASTE

3 MANAGEMENT

4 For Department of Energy expenses necessary for

5 atomic energy defense environmental restoration and

6 waste management activities, $2,000,000,000, to remain

7 available until expended: Provided, That of the funds ap8 propriated herein, $1,000,000,000 shall be available for

9 environmental restoration, $750,000,000 shall be available

10 for waste management, and $250,000,000 shall be avail11 able for corrective activities.

12 (c) APPROPRIATIONS FOR FISCAL YEAR 1996.—The

13 following sums are appropriated, out of any money in the

14 Treasury not otherwise appropriated, for the fiscal year

15 ending September 30, 1996, to implement the provisions

16 of this Act, namely:

17 DEPARTMENT OF DEFENSE

18 OPERATION AND MAINTENANCE

19 ENVIRONMENTAL RESTORATION, DEFENSE

20 For the Department of Defense, for deposit into the

21 Defense Environmental Restoration Account established

22 in section 2703 of title 10, United States Code,

23 $1,000,000,000, to remain available until transferred.
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1 MILITARY CONSTRUCTION

2 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART II

3 For deposit into the Department of Defense Closure

4 Account 1990 established by section 2906(a) of the Na5 tional Defense Authorization Act for Fiscal Year 1991

6 (Public Law 101–510; 10 U.S.C. 2687 note),

7 $500,000,000, to be available solely for environmental res8 toration and to remain available until expended.

9 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART III

10 For deposit into the Department of Defense Closure

11 Account 1990 established by section 2906(a) of the Na12 tional Defense Authorization Act for Fiscal Year 1991

13 (Public Law 101–510; 10 U.S.C. 2687 note),

14 $500,000,000, to be available solely for environmental res15 toration and to remain available until expended.

16 DEPARTMENT OF ENERGY

17 DEFENSE ENVIRONMENTAL RESTORATION AND WASTE

18 MANAGEMENT

19 For Department of Energy expenses necessary for

20 atomic energy defense environmental restoration and

21 waste management activities, $2,000,000,000, to remain

22 available until expended: Provided, That of the funds ap23 propriated herein, $1,000,000,000 shall be available for

24 environmental restoration, $750,000,000 shall be available

25 for waste management, and $250,000,000 shall be avail26 able for corrective activities.
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1 (d) DESIGNATION AS EMERGENCY REQUIREMENT.—

2 The entire amount appropriated under this section is des3 ignated by Congress as an emergency requirement pursu4 ant to section 251(b)(2)(D)(i) of the Balanced Budget and

5 Emergency Deficit Control Act of 1985.

6 Subtitle F—Community

7 Development Assistance

8 CHAPTER 1—COMMUNITY DEVELOPMENT

9 BLOCK GRANTS

10 SEC. 1501. AUTHORIZATION OF APPROPRIATIONS.

11 For assistance under section 106 of the Housing and

12 Community Development Act of 1974, there is authorized

13 to be appropriated, in addition to any amounts authorized

14 under section 103 of such Act, $2,000,000,000 for fiscal

15 year 1995 and $2,000,000,000 for fiscal year 1996.

16 CHAPTER 2—COMMUNITY BANKING AND

17 ECONOMIC EMPOWERMENT ACT

18 SEC. 1511. SHORT TITLE.

19 This chapter may be cited as the ‘‘Community Bank20 ing and Economic Empowerment Act’’.

21 SEC. 1512. AUTHORITY OF SECRETARY.

22 (a) IN GENERAL.—To make credit and credit-related

23 services available to low-income families and others not

24 adequately served by traditional lending institutions and

25 promote community development, economic development,
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1 and revitalization of low-income neighborhoods, the Sec2 retary of Housing and Urban Development shall provide,

3 to the extent amounts are provided in appropriation

4 Acts—

5 (1) assistance under section 1514 to community

6 development lenders and other eligible entities that

7 have submitted applications under section 1516 that

8 have been approved by the Secretary and have en9 tered into agreements with the Secretary under sec10 tion 1517; and

11 (2) technical assistance under section 1519 to

12 assist in organizing and operating community devel13 opment lenders.

14 (b) CONSULTATION.—The Secretary of Housing and

15 Urban Development shall consult with the Secretary of the

16 Treasury in developing, implementing, and carrying out

17 this chapter, and in providing assistance to community de18 velopment lenders under section 1514.

19 SEC. 1513. ELIGIBLE COMMUNITY DEVELOPMENT LEND20 ERS.

21 (a) IN GENERAL.—Applications for assistance under

22 section 1514 may be submitted only by the following enti23 ties:

24 (1) COMMUNITY DEVELOPMENT LENDERS.—

25 Any corporation, partnership, organization, agency,
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1 person, or other entity (which may include for-profit

2 and nonprofit entities, community development cor3 porations, microenterprise organizations, community

4 organizations, and other entities and persons) that—

5 (A) is organized for the purposes described

6 in subsection (b); and

7 (B) is not a depository institution (as such

8 term is defined in section 3(c) of the Federal

9 Deposit Insurance Act) or a credit union, or an

10 affiliate or subsidiary of a depository institution

11 or credit union (including community develop12 ment credit unions, savings and loan associa13 tions, and other depository institutions).

14 (2) ELIGIBLE ENTITIES ESTABLISHING COMMU15 NITY DEVELOPMENT LENDERS.—Any corporation,

16 partnership, organization, agency, person, or other

17 entity that—

18 (A) is engaged in organizing or establish19 ing a community development financial institu20 tion; and

21 (B) is not a depository institution (as such

22 term is defined in section 3(c) of the Federal

23 Deposit Insurance Act) or a credit union, or an

24 affiliate or subsidiary of a depository institution

25 or credit union (including community develop-
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1 ment credit unions, savings and loan associa2 tions, and other depository institutions).

3 (b) PURPOSE.—To be eligible to receive assistance

4 under section 1514, a community development lender ap5 plying for such assistance (or to be established by the eligi6 ble entity applying for such assistance) shall have among

7 its principal purposes making credit and credit-related

8 services available to low-income families and in low-income

9 neighborhoods and promoting the development and revital10 ization of low-income neighborhoods. The community de11 velopment lender shall carry out such purpose by making

12 loans to individuals, families, businesses, organizations,

13 and other entities and conducting such other activities and

14 services relating to making loans (such as loan counseling

15 and servicing) as the lender considers appropriate. Such

16 loans may include mortgage loans, loans for housing devel17 opment, rehabilitation, and weatherization, business devel18 opment and assistance loans, personal loans, operating

19 loans, construction loans, loans for community and

20 economic development activities, and other repayable

21 assistance.

22 (c) GOVERNANCE.—To be eligible to receive assist23 ance under section 1514, a community development lender

24 applying for such assistance (or to be established by the
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1 eligible entity applying for such assistance) shall be gov2 erned by a board of directors that—

3 (1) is solely responsible for determining policy

4 for the community development lender with respect

5 to management and operations, lending activities,

6 loan standards and implementation, employment,

7 asset management, and any other issues; and

8 (2) includes among its members a significant

9 number of members who are individuals meeting the

10 requirements of any of subparagraphs (A) through

11 (D), who shall include—

12 (A) individuals who are members of low-in13 come families;

14 (B) individuals who are residents of the

15 low-income neighborhood served by the lender;

16 (C) individuals who are experienced in pro17 viding financial assistance or financial advice to

18 low-income individuals or residents, businesses,

19 or organizations in low-income neighborhoods;

20 and

21 (D) individuals who have significant expe22 rience in serving the low-income neighborhood

23 served by the lender, the community in which

24 such neighborhood is located, or any other low25 income neighborhood.
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1 SEC. 1514. CAPITAL AND OPERATING ASSISTANCE FOR

2 COMMUNITY DEVELOPMENT LENDERS.

3 (a) AUTHORITY.—The Secretary may provide assist4 ance under this section to community development lenders

5 and eligible entities establishing community development

6 lenders, for the purposes under subsection (b).

7 (b) PURPOSES.—Assistance under this section may

8 be used only as provided in the assistance agreement

9 under section 1517 for the community development lender

10 or eligible entity and only for the following purposes:

11 (1) FEASIBILITY STUDIES.—To carry out stud12 ies to determine the feasibility of establishing a pro13 gram to make loans for the purposes under section

14 1513(b) within a particular low-income neighbor15 hood.

16 (2) CAPITAL ASSISTANCE.—To provide capital

17 for the community development lender—

18 (A) to establish or supplement amounts

19 available for loans for the purposes under sec20 tion 1513(b);

21 (B) to provide credit enhancement for

22 loans for the purposes under section 1513(b);

23 (C) to establish or supplement capital re24 serves of the lender; and

25 (D) to carry out other activities, as the

26 Secretary may provide.
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1 (3) OPERATING COSTS.—To provide amounts to

2 cover operating costs of the community development

3 lender, including marketing and management activi4 ties, business planning and counseling services, staff

5 training, planning costs, costs relating to establish6 ing the community development lender or changing

7 the activities or management of a financial institu8 tion or other organization or entity to include com9 munity development lending activities.

10 (c) OTHER TERMS.—The Secretary may establish

11 any terms and conditions of assistance under this section

12 that the Secretary considers appropriate to carry out the

13 purposes of this subtitle, including limitations on the

14 amount of assistance provided to any community develop15 ment lender or eligible entity, limitations on the number

16 of applications that may be approved for any single com17 munity development lender or eligible entity, and require18 ments and limitations for the amounts and timing of the

19 disbursement of assistance.

20 (d) NON-FEDERAL FUNDS REQUIREMENT.—The

21 Secretary may not provide assistance under this section

22 to any eligible entity for the establishment of a community

23 development lender in an amount in excess of 9 times the

24 amount that the entity certifies, as the Secretary shall re25 quire, that the entity will contribute from non-Federal
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1 sources to the community development lender established

2 with amounts provided under this section.

3 SEC. 1515. REQUIREMENTS OF ASSISTED COMMUNITY DE4 VELOPMENT LENDERS.

5 (a) PROHIBITION OF DIRECT ASSISTANCE.—A com6 munity development lender that receives assistance under

7 section 1514 (or established by an eligible entity that re8 ceives such assistance) may not provide amounts to any

9 person from assistance received under such section in the

10 form of a grant or nonrepayable advance or on any other

11 nonrepayable basis, during the assistance agreement term

12 established by the assistance agreement for the lender

13 under section 1517.

14 (b) LOW-INCOME FAMILY REQUIREMENTS.—

15 (1) REQUIREMENT.—In each calendar year dur16 ing the applicable assistance agreement term, a com17 munity development lender that receives assistance

18 under section 1514 (or established by an eligible en19 tity that receives such assistance) shall make loans

20 under section 1513(b) benefiting low-income fami21 lies—

22 (A) in a number that is not less than 50

23 percent of the total number of loans made by

24 the lender during such year; and
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1 (B) in an amount such that the sum of the

2 principal amounts of such loans is not less than

3 50 percent of the sum of the principal amounts

4 of all loans made by the lender during such

5 year.

6 (2) DETERMINATION OF BENEFIT.—

7 (A) DIRECT BENEFIT.—A loan shall be

8 considered to benefit a low-income family for

9 purposes of paragraph (1) if the loan—

10 (i) is made to such a family;

11 (ii) is made for an activity that is car12 ried out in a low-income neighborhood and

13 for providing services for such families;

14 (iii) is made for providing facilities de15 signed for the use predominantly by such

16 families; or

17 (iv) is made for an activity that in18 volves employment of persons, a majority

19 of whom are members of such families.

20 (B) ACTIVITIES OF GENERAL BENEFIT.—

21 In any case in which an activity assisted with

22 a loan is designed to serve an area generally

23 and is clearly designed to meet identified needs

24 of low-income families in such area, such loan

25 or activity shall be considered to benefit low-in-
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1 come families for purposes of paragraph (1) to

2 the extent that the area is a low-income neigh3 borhood.

4 (C) HOUSING.—A loan for the acquisition,

5 construction, or rehabilitation of property to

6 provide housing shall be considered to benefit

7 low-income families for purposes of paragraph

8 (1) only to the extent that such housing, upon

9 completion, is occupied by low-income families.

10 (c) LOW-INCOME NEIGHBORHOOD REQUIRE11 MENTS.—In each calendar year during the applicable as12 sistance agreement term, a community development lender

13 that receives assistance under section 1514 (or established

14 by an eligible entity that receives such assistance) shall

15 make loans under section 1513(b) for facilities or activities

16 that serve the low-income neighborhood served by the

17 lender—

18 (1) in a number that is not less than 50 percent

19 of the total number of loans made by the lender dur20 ing such year; and

21 (2) in an amount such that the sum of the prin22 cipal amounts of such loans is not less than 50 per23 cent of the sum of the principal amounts of all loans

24 made by the lender during such year.
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1 (d) EMPLOYMENT PLAN.—During the applicable as2 sistance agreement term, a community development lender

3 that receives assistance under section 1514 (or established

4 by an eligible entity that receives such assistance) shall

5 establish and comply with a written employment plan

6 under this subsection. The Secretary shall, by regulation,

7 require that each employment plan under this subsection

8 set forth a policy for hiring employees of the community

9 development lender that—

10 (1) furthers the purposes of this subtitle by

11 providing employment opportunities in the neighbor12 hood served by the community development lender

13 for residents of the neighborhood; and

14 (2) gives preference in hiring to—

15 (A) individuals who are members of low-in16 come families residing in the neighborhood

17 served by the community development lender;

18 and

19 (B) individuals who were formerly em20 ployed in positions at any office or branch of a

21 depository institution, credit union, or other fi22 nancial institution that is or was located in the

23 neighborhood served by the community develop24 ment lender and who are not employed in such

25 positions because of the closing or reorganiza-
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1 tion of the office, branch, or institution, or be2 cause of the elimination of such positions or

3 any decrease in compensation paid for such

4 positions.

5 (e) RESERVE REQUIREMENTS.—

6 (1) MAINTENANCE OF RESERVE.—During the

7 applicable assistance agreement term, a community

8 development lender that receives assistance under

9 section 1514 (or established by an eligible entity

10 that receives such assistance) shall maintain, at all

11 times, a reserve against losses on loans and any

12 other losses in the amount determined under para13 graph (2).

14 (2) ESTABLISHMENT OF REQUIREMENTS.—The

15 Secretary shall, by regulation, establish reserve

16 amounts to be maintained by community develop17 ment lenders taking into consideration the purposes

18 of such lenders, the nature of lending engaged in by

19 such lenders, the size and amount of business of

20 such lenders, the need for such lending in the com21 munities and low-income neighborhoods served by

22 such lenders, and any other factors the Secretary

23 considers appropriate.

24 (3) REPLENISHMENT.—If at any time during

25 the applicable assistance agreement term, the
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1 amount reserved by a community development lender

2 under this subsection is less than the amount re3 quired to be reserved under the regulations issued

4 pursuant to paragraph (2), the Secretary may take

5 such actions as the Secretary may, by regulation,

6 provide that are consistent with the purposes of this

7 subtitle, including withholding any assistance

8 amounts to be provided to the lender under the

9 agreement under section 1517 but not yet disbursed

10 and requiring the lender to replenish the reserve by

11 regular contributions in the amounts determined by

12 the Secretary.

13 (f) STAFF.—During the applicable assistance agree14 ment term, a community development lender that receives

15 assistance under section 1514 (or established by an eligi16 ble entity that receives assistance under such section) shall

17 maintain personnel qualified and capable of conducting

18 the activities described under section 1513(b) and the

19 other activities of the lender relating to community devel20 opment, as the Secretary may require.

21 SEC. 1516. APPLICATION AND APPROVAL FOR ASSISTANCE.

22 (a) REQUIREMENT.—The Secretary may provide as23 sistance under section 1514 only to community develop24 ment lenders and eligible entities establishing community

25 development lenders that have submitted applications
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1 under this section to the Secretary that have been ap2 proved under subsection (d).

3 (b) TIME AND MANNER.—The Secretary shall estab4 lish requirements regarding the submission of applications

5 under this section, which shall include requirements for

6 the time and manner of submission.

7 (c) CONTENTS.—An application under this section

8 shall contain the following information:

9 (1) COMMUNITY DEVELOPMENT LENDER.—A

10 description of—

11 (A) the existing community development fi12 nancial institution to be assisted; or

13 (B) in the case of an eligible entity submit14 ting the application for assistance, the commu15 nity development lender to be established by the

16 eligible entity, the existing relationship between

17 the eligible entity and the community develop18 ment lender to be established, and any continu19 ing relationship that will exist between the

20 eligible entity and the community development

21 lender.

22 (2) LOW-INCOME NEIGHBORHOOD SERVED.—

23 Identification and a description of the low-income

24 neighborhood in which the community development

25 lender is, or is to be, located and conduct its prin-
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1 cipal operations and a description of the existing

2 availability of credit and credit-related services in

3 such neighborhood.

4 (3) TYPES OF BUSINESS.—A description of the

5 types of business engaged in, or to be engaged in,

6 by the community development lender and of the

7 need for such business in the neighborhood served

8 by the community development lender.

9 (4) BOARD OF DIRECTORS AND OPERATION.—

10 In the case of an application by an existing commu11 nity development lender, a description of the board

12 of directors of the community development lender

13 and the structure of the management and operations

14 of the community development lender.

15 (5) FINANCIAL EXPERTISE.—In the case of an

16 application by an existing community development

17 lender, a description of any lending or financial ex18 pertise or experience of the members of the board of

19 directors of the community development lender and

20 the managers or employees of the lender.

21 (6) FINANCIAL HISTORY.—In the case of an ap22 plication by an existing community development

23 lender, any financial information regarding the com24 munity development lender that the Secretary con25 siders necessary in determining whether to provide
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1 assistance to the community development lender, in2 cluding information regarding any history of compli3 ance with the requirements of section 1515.

4 (7) REGULATION.—Identification of any Fed5 eral, State, and local laws, ordinances, and regula6 tions under which the financial operations of the

7 community development lender are, or are to be,

8 subject to the supervision, approval, regulation, or

9 insuring of any agency or other instrumentality of

10 the Federal Government or the State or local gov11 ernment and identification of the agency or instru12 mentality.

13 (8) NEW COMMUNITY DEVELOPMENT LEND14 ERS.—In the case of an application by an eligible

15 entity for assistance for the establishment of a com16 munity development lender, any financial, organiza17 tional, or other information that the Secretary con18 siders necessary in determining whether to provide

19 such assistance.

20 (9) ASSISTANCE.—A description of the amount

21 of assistance for which the community development

22 lender or eligible entity is applying and a description

23 of the purposes for which such assistance will be

24 used.
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1 (10) EMPLOYMENT PLAN.—An employment

2 plan in accordance with the regulations issued under

3 section 1515(d).

4 (11) COMPLIANCE WITH REQUIREMENTS.—A

5 description of the actions to be taken by the commu6 nity development lender (or the eligible entity estab7 lishing the community development lender) to ensure

8 compliance with the requirements under section

9 1515.

10 (12) OTHER.—Any other information the Sec11 retary considers appropriate to carry out, and en12 sure compliance with, the provisions of this subtitle.

13 (d) REVIEW AND APPROVAL.—

14 (1) REVIEW.—The Secretary shall promptly re15 view each application submitted under this section.

16 (2) MINIMUM STANDARDS FOR APPROVAL.—

17 The Secretary may approve an application under

18 this section for assistance only if the Secretary de19 termines, based on the information contained in an

20 application, that—

21 (A) the lender will operate in accordance

22 with the requirements of this chapter and in a

23 financially safe and sound manner; and

24 (B) the assistance is necessary and appro25 priate to facilitate the provision of credit and
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1 credit-related services in the neighborhood

2 served by the lender to low-income families and

3 others not adequately served by traditional

4 lending institutions.

5 (3) SELECTION CRITERIA.—The Secretary shall

6 approve applications under this subsection based on

7 competitive selection criteria, which the Secretary

8 shall establish by regulation.

9 (4) NOTIFICATION.—The Secretary shall

10 promptly notify each applicant of the approval or

11 disapproval of the applicant’s application. In the

12 case of any disapproval, such notification shall in13 clude a statement of the reasons for the disapproval

14 and of the availability of technical assistance under

15 section 1519.

16 SEC. 1517. ASSISTANCE AGREEMENTS.

17 (a) REQUIREMENT.—The Secretary may not provide

18 assistance under section 1514 for an application for such

19 assistance approved under section 1516 unless the com20 munity development lender or eligible entity submitting

21 the application enters into a written agreement with the

22 Secretary under this section.

23 (b) CONTENTS.—An agreement under this section

24 shall provide the following:
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1 (1) NEIGHBORHOOD SERVED.—A delineation of

2 the boundaries of the low-income neighborhood with3 in which the community development lender shall be

4 located and in which the lender shall conduct its

5 principal operations.

6 (2) COMPLIANCE WITH REQUIREMENTS.—That

7 the community development lender shall comply with

8 the requirements under section 1515.

9 (3) SAFE AND SOUND OPERATION.—That the

10 community development lender shall operate in a fi11 nancially safe and sound manner.

12 (4) BOOKS AND RECORDS.—That the commu13 nity development lender shall operate and maintain

14 books and records in accordance with the regulations

15 issued by the Secretary under section 1518 and will

16 provide the Secretary with access to such books and

17 records for purposes of determining the compliance

18 of the lender with the requirements of this subtitle

19 and the provisions of the agreement under this sec20 tion.

21 (5) PERFORMANCE STANDARDS AND SANC22 TIONS.—Standards for the performance and finan23 cial operation of the community development lender

24 appropriate for the particular lender, including

25 standards relating to the lending volume, portfolio
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1 performance, personnel development, service to the

2 neighborhood served by the lender, and sanctions for

3 failure to comply with such standards.

4 (6) REPORTS.—That the community develop5 ment lender (or the eligible entity establishing the

6 community development lender) shall submit reports

7 to the Secretary including such information, at such

8 times, and in such manner, as required by the Sec9 retary and provided in the agreement.

10 (7) ASSISTANCE.—The amount of assistance to

11 be provided to the community development lender

12 (or eligible entity establishing the community devel13 opment lender), the purposes under section 1514(b)

14 for which such assistance will be used, and the tim15 ing and terms of the disbursement of such assist16 ance.

17 (8) OTHER CONDITIONS.—That the community

18 development lender shall comply with any other writ19 ten conditions (which shall be contained in the

20 agreement) that the Secretary considers appropriate

21 to carry out the purposes of this subtitle.

22 (9) PERIOD OF COMPLIANCE.—The period dur23 ing which the community development lender shall

24 comply with the provisions of the agreement under
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1 this section, which shall not be shorter than 12

2 months in duration.

3 (c) FEDERAL OR OTHER REGULATION OF LEND4 ER.—An agreement under this section may not be con5 strued to annul, alter, affect, or exempt the community

6 development lender receiving assistance pursuant to the

7 agreement (or established by the eligible entity receiving

8 such assistance) from complying with any Federal, State,

9 or local laws, ordinances, and regulations applicable to the

10 financial and other operations of community development

11 lender or with any orders or rulings of any agency or in12 strumentality of the Federal Government or the State or

13 local government responsible for the supervision, approval,

14 regulation, or insuring of the community development

15 lender.

16 SEC. 1518. BOOKS, RECORDS, AND AUDITS.

17 (a) BOOKS AND RECORDS.—During the applicable

18 assistance agreement term, a community development

19 lender that receives assistance under section 1514 (or es20 tablished by an eligible entity that receives such assist21 ance) shall maintain the books and records of the lender

22 in the manner that the Secretary shall, by regulation, re23 quire.

24 (b) EXAMINATIONS AND AUDITS.—
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1 (1) RECERTIFICATION.—The Secretary shall,

2 not less than once each year during the applicable

3 assistance agreement term, conduct an examination

4 of the books, records, and financial accounts and

5 transactions of each community development lender

6 receiving assistance under section 1514 (or estab7 lished by an eligible entity receiving assistance under

8 such section) for the purpose of determining compli9 ance of the lender with this subtitle and the provi10 sions of the agreement.

11 (2) OTHER.—During the applicable assistance

12 agreement term, the Secretary may conduct any

13 other examinations and audits of such a community

14 development lender and its accounts and trans15 actions that the Secretary considers appropriate to

16 determine the condition of the lender and compliance

17 with the provisions of the assistance agreement.

18 SEC. 1519. TECHNICAL ASSISTANCE FOR ORGANIZING AND

19 OPERATING COMMUNITY DEVELOPMENT

20 LENDERS.

21 (a) ASSISTANCE TO ESTABLISH COMMUNITY DEVEL22 OPMENT LENDERS.—The Secretary shall carry out a pro23 gram under this subsection to provide technical assistance

24 in establishing community development financial institu25 tions, which shall include—
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1 (1) educating organizations, financial institu2 tions, governmental agencies, and other entities and

3 persons in low-income neighborhoods and elsewhere

4 regarding the need for, capabilities, functions, and

5 organization of community development lenders;

6 (2) educating and training organizations, finan7 cial institutions, and other entities and persons in

8 organizing community development lenders and ap9 plying for assistance under this subtitle for estab10 lishment of community development lenders;

11 (3) assisting entities and persons interested in

12 establishing community development lenders in iden13 tifying community lending needs and meeting the

14 application requirements and preparing applications

15 under this subtitle; and

16 (4) assisting community development lenders

17 and eligible entities whose applications have been

18 disapproved under section 1516(d) to submit approv19 able applications for assistance under section 1514.

20 (b) ASSISTANCE FOR OPERATING COMMUNITY DE21 VELOPMENT LENDERS.—The Secretary shall carry out a

22 program under this subsection to provide technical assist23 ance to community development lenders, which shall in24 clude—
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1 (1) education and training regarding manage2 ment and operation of the lenders, including design3 ing and utilizing lending practices to target credit to

4 low-income families and neighborhoods, complying

5 with financial and accounting standards under the

6 agreement for the lender under section 1517, and

7 implementing effective asset management and fund

8 development techniques;

9 (2) collecting and disseminating information

10 from various community development lenders re11 garding successful management and operation tech12 niques, lending practices, and lending activities; and

13 (3) training personnel of lenders to meet re14 quirements under section 1515(f).

15 (c) PROVISION OF ASSISTANCE.—The Secretary may

16 provide technical assistance under this section directly or

17 through public or private organizations pursuant to con18 tracts with such organizations or grants to such organiza19 tions.

20 (d) ADMINISTRATION.—The Secretary may provide

21 for making technical assistance under this section avail22 able to community development lenders and eligible enti23 ties that receive assistance under section 1514 pursuant

24 to a request for such assistance in an application under

25 section 1516, approval of the application, and the inclu-
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1 sion of terms in the assistance agreement under section

2 1517 providing for such assistance.

3 SEC. 1520. RELATIONSHIP TO COMMUNITY REINVESTMENT

4 ACT OF 1977.

5 Section 807(b) of the Community Reinvestment Act

6 of 1977 (12 U.S.C. 2906(b)) is amended by adding at the

7 end the following new paragraph:

8 ‘‘(3) COORDINATION WITH COMMUNITY BANK9 ING AND ECONOMIC EMPOWERMENT ACT.—No regu10 lated financial institution may receive a rating of

11 ‘outstanding record of meeting community credit

12 needs’ or ‘satisfactory record of meeting community

13 credit needs’ solely on the basis of loans to or invest14 ments in community development lenders.’’.

15 SEC. 1521. REPORTS TO CONGRESS.

16 The Secretary shall submit a report to the Congress

17 not later than July 1 of each year in which the Secretary

18 provides assistance under section 1514 to community de19 velopment lenders or eligible entities, which shall de20 scribe—

21 (1) the assistance provided under such section,

22 the purposes for which such assistance will be used,

23 the neighborhoods to be served by the community

24 development lenders assisted, and the activities of

25 community development lenders assisted; and
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1 (2) any technical assistance provided under sec2 tion 1519 by the Secretary.

3 SEC. 1522. REGULATIONS.

4 The Secretary of Housing and Urban Development,

5 jointly with the Secretary of the Treasury, shall issue any

6 regulations necessary to carry out this subtitle.

7 SEC. 1523. DEFINITIONS.

8 For purposes of this chapter:

9 (1) The term ‘‘assistance agreement’’ means an

10 agreement under section 1517 between the Secretary

11 and a community development lender or eligible en12 tity receiving assistance under section 1514.

13 (2) The term ‘‘assistance agreement term’’

14 means the period established by an assistance agree15 ment during which the community development lend16 er that receives assistance under section 1514 pursu17 ant to the agreement (or established by the eligible

18 entity that receives such assistance) shall comply

19 with the provision of the agreement.

20 (3) The term ‘‘community development finan21 cial institution’’ means a financial institution de22 scribed in section 1513(a)(1) that meets the require23 ments under subsections (b) and (c) of section 1513.

24 (4) The term ‘‘community development lender’’

25 means a community development financial institu-
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1 tion that meets the requirements under subsections

2 (b) and (c) of section 1513.

3 (5) The term ‘‘eligible entity’’ means any entity

4 described in section 1513(a)(2).

5 (6) The term ‘‘low-income family’’ means any

6 individual or family whose income does not exceed

7 80 percent of the median income for the area, as de8 termined by the Secretary with adjustments for

9 smaller and larger families; except that the Sec10 retary may establish income ceilings higher or lower

11 than 80 percent of the median for the area on the

12 basis of any findings by the Secretary that such

13 variations are necessary because of unusually high

14 or low prevailing incomes.

15 (7) The term ‘‘low-income neighborhood’’

16 means any area within a city, county, town, town17 ship, parish, village, or other general purpose sub18 division of a State—

19 (A) that has a continuous boundary; and

20 (B) in which not less than 20 percent of

21 the residents are members of low-income fami22 lies.

23 (8) The term ‘‘low-income neighborhood served

24 by a community development lender’’ means the low25 income neighborhood identified in an application
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1 under section 1516 and an assistance agreement

2 under section 1517 as the area in which the commu3 nity development lender that receives assistance pur4 suant to such application and agreement (or estab5 lished by the eligible entity that receives such assist6 ance) will be located and conduct its principal oper7 ations.

8 (9) The term ‘‘Secretary’’ means the Secretary

9 of Housing and Urban Development.

10 SEC. 1524. AUTHORIZATION OF APPROPRIATIONS.

11 There is authorized to be appropriated for each of

12 fiscal years 1995 and 1996—

13 (1) $800,000,000 for assistance under section

14 1514; and

15 (2) $200,000,000 for providing technical assist16 ance under section 1519.

17 Subtitle G—Education

18 Infrastructure

19 SEC. 1601. SHORT TITLE.

20 This subtitle may be cited as the ‘‘Education Infra21 structure Act of 1994’’.

22 SEC. 1602. FINDINGS.

23 The Congress finds that—

24 (1) improving the quality of public elementary

25 and secondary school libraries, media centers, and
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1 facilities will help our Nation meet the National

2 Education Goals;

3 (2) Federal, State, and local funding for the re4 pair, renovation, alteration and construction of pub5 lic elementary and secondary school libraries, media

6 centers, and facilities has not adequately reflected

7 need; and

8 (3) the challenges facing our Nation’s public el9 ementary and secondary schools require the con10 certed and collaborative efforts of all levels of gov11 ernment and all sectors of the community.

12 SEC. 1603. PURPOSE.

13 It is the purpose of this subtitle to help our Nation

14 meet the National Education Goals through the repair,

15 renovation, alteration and construction of public elemen16 tary and secondary school libraries, media centers, and fa17 cilities, used for academic or vocational instruction.

18 SEC. 1604. DEFINITIONS.

19 For purposes of this subtitle—

20 (1) the term ‘‘alteration’’ refers to any change

21 to an existing property for use for a different pur22 pose or function;

23 (2) the term ‘‘construction’’ refers to the erec24 tion of a building, structure, or facility, including the

25 concurrent installation of equipment, site prepara-
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1 tion, associated roads, parking, and utilities, which

2 provides area or cubage not previously available, in3 cluding—

4 (A) freestanding structures, additional

5 wings, or floors, enclosed courtyards or

6 entryways, and any other means to provide usa7 ble program space that did not previously exist;

8 and

9 (B) the complete replacement of an exist10 ing facility;

11 (3) the term ‘‘eligible local educational agency’’

12 means a local educational agency, as such term is

13 defined in section 1471 of the Elementary and Sec14 ondary Education Act of 1965, which demonstrates

15 in the application submitted under section 1607 that

16 such agency—

17 (A) has urgent repair, renovation, alter18 ation and construction needs for its public ele19 mentary or secondary school libraries, media

20 centers, and facilities, used for academic or vo21 cational instruction; and

22 (B) serves large numbers or percentages of

23 disadvantaged students;
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1 (4) the term ‘‘renovation’’ refers to any change

2 to an existing property to allow its more efficient use

3 within such property’s designated purpose;

4 (5) the term ‘‘repair’’ refers to the restoration

5 of a failed or failing real property facility, compo6 nent, or a building system to such a condition that

7 such facility, component, or system may be used ef8 fectively for its designated purpose, if, due to the na9 ture or extent of the deterioration or damage to such

10 facility, component, or system, such deterioration or

11 damage cannot be corrected through normal mainte12 nance; and

13 (6) the term ‘‘Secretary’’, unless otherwise

14 specified, means the Secretary of Education.

15 SEC. 1605. IMPROVEMENT OF PUBLIC ELEMENTARY AND

16 SECONDARY EDUCATION FACILITIES PRO17 GRAM AUTHORIZED.

18 (a) PROGRAM AUTHORITY.—From amounts appro19 priated pursuant to the authority of subsection (b) in any

20 fiscal year, the Secretary shall award grants to eligible

21 local educational agencies having applications approved

22 under section 1606 to carry out the authorized activities

23 described in section 1607.

24 (b) AUTHORIZATION OF APPROPRIATIONS.—There

25 are to be appropriated $3,000,000,000 for fiscal year
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1 1995, and such sums as may be necessary for each of the

2 fiscal years 1996 through 2004, to carry out this subtitle.

3 SEC. 1606. APPLICATIONS.

4 (a) CONTENTS REQUIRED.—Each eligible local edu5 cational agency desiring to receive a grant under this sub6 title shall submit an application to the Secretary. Each

7 such application shall—

8 (1) contain an assurance that such application

9 was developed in consultation with parents and

10 classroom teachers; and

11 (2) include—

12 (A) a description of each architectural,

13 civil, structural, mechanical, electrical, or tele14 phone line, deficiency to be corrected with funds

15 provided under this subtitle, including the prior16 ity for the repair of the deficiency;

17 (B) a description of the corrective action to

18 be supported with funds provided under this

19 subtitle;

20 (C) a cost estimate of the proposed correc21 tive action;

22 (D) an identification of the total amount

23 and percentage of such agency’s budget used in

24 the preceding fiscal year for the maintenance,

25 repair, renovation, alteration, and construction
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1 of public elementary and secondary school li2 braries, media centers, and facilities;

3 (E) a description of how such agency plans

4 to maintain the repair, renovation, alteration,

5 or construction supported with funds provided

6 under this subtitle;

7 (F) a description of the extent to which the

8 repair, renovation, alteration, or construction

9 will help the Secretary meet the goals described

10 in section 1609(1)(A); and

11 (G) such other information as the Sec12 retary may reasonably require.

13 (b) PRIORITIES IN SELECTION OF APPLICATIONS.—

14 In selecting applications for the award of grant funds

15 under this subtitle, the Secretary shall give priority to

16 local educational agencies that—

17 (1) are seeking funds for the repair, renovation,

18 alteration, or construction of facilities that are the

19 oldest for which funds are sought under this sub20 title;

21 (2) have the highest number of facilities with

22 health and safety hazards from one or more of the

23 following sources: asbestos, lead, radon, plumbing,

24 electrical wiring; and
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1 (3) serve areas with high rates of unemploy2 ment.

3 SEC. 1607. AUTHORIZED ACTIVITIES.

4 Each eligible local educational agency receiving a

5 grant under this subtitle shall use such grant funds to help

6 our Nation meet the National Education Goals through

7 the repair, renovation, alteration, and construction of a

8 public elementary or secondary school library, media cen9 ter, or facility, used for academic or vocational instruction,

10 including—

11 (1) inspection of such library, center, or facility;

12 (2) repairing such library, center, or facility

13 that poses a health or safety risk to students;

14 (3) upgrading of and alteration to such library,

15 center, or facility in order to accommodate new in16 structional technology;

17 (4) meeting the requirements of section 504 of

18 the Rehabilitation Act of 1973 and the Americans

19 with Disabilities Act of 1990;

20 (5) removal or containment of severely hazard21 ous material such as asbestos, lead, and radon using

22 a cost-effective method;

23 (6) installation or upgrading of school security

24 and communications systems;

25 (7) energy conservation;
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1 (8) meeting Federal, State, or local codes relat2 ed to fire, air, light, noise, waste disposal, building

3 height, or other codes passed since the initial con4 struction of such library, center, or facility; and

5 (9) replacing an old library, center, or facility

6 that is most cost-effectively torn down rather than

7 renovated.

8 SEC. 1608. REQUIREMENTS.

9 (a) SPECIAL RULES.—

10 (1) MAINTENANCE OF EFFORT.—An eligible

11 local educational agency may receive a grant under

12 this subtitle for any fiscal year only if the Secretary

13 finds that either the combined fiscal effort per stu14 dent or the aggregate expenditures of that agency

15 and the State with respect to the provision of free

16 public education by such local educational agency for

17 the preceding fiscal year was not less than 90 per18 cent of such combined fiscal effort or aggregate ex19 penditures for the fiscal year for which the deter20 mination is made.

21 (2) SUPPLEMENT NOT SUPPLANT.—An eligible

22 local educational agency shall use funds received

23 under this subtitle only to supplement the amount of

24 funds that would, in the absence of such Federal

25 funds, be made available from non-Federal sources
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1 for the repair and construction of school facilities

2 used for educational purposes, and not to supplant

3 such funds.

4 (b) GENERAL LIMITATIONS.—

5 (1) REAL PROPERTY.—No part of any grant

6 funds under this subtitle shall be used for the acqui7 sition of any interest in real property.

8 (2) MAINTENANCE.—Nothing in this subtitle

9 shall be construed to authorize the payment of main10 tenance costs in connection with any projects con11 structed in whole or in part with Federal funds pro12 vided under this subtitle.

13 (3) ENVIRONMENTAL SAFEGUARDS.—All

14 projects carried out with Federal funds provided

15 under this subtitle shall comply with all relevant

16 Federal, State, and local environmental laws and

17 regulations.

18 (4) APPLICABILITY OF LAWS REGARDING INDI19 VIDUALS WITH DISABILITIES.—Sections 504 and

20 505 of the Rehabilitation Act of 1973 and the Amer21 icans with Disabilities Act of 1990 shall apply to

22 projects carried out with Federal funds provided

23 under this subtitle.
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1 SEC. 1609. CONTRACTS.

2 If a project assisted under this subtitle will be carried

3 out pursuant to a contract, the following limitations shall

4 apply:

5 (1) MINORITY PARTICIPATION.—The Secretary

6 shall establish—

7 (A) goals for the participation of small

8 business concerns as contractors or subcontrac9 tors that meet or exceed the governmentwide

10 goals established pursuant to section 15(g)(1)

11 of the Small Business Act (15 U.S.C.

12 644(g)(1)) for the participation of such con13 cerns in contracts supported with funds under

14 this subtitle (and subcontracts under such con15 tracts); and

16 (B) an evaluation process for such partici17 pation that gives significant weight to the goals

18 described in subparagraph (A).

19 (2) DAVIS-BACON.—All laborers and mechanics

20 employed by contractors or subcontractors in the

21 performance of any contract and subcontract for the

22 repair, renovation, alteration, or construction, in23 cluding painting and decorating, of any building or

24 work that is financed in whole or in part by a grant

25 under this subtitle, shall be paid wages not less than

26 those determined by the Secretary of Labor in ac-
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1 cordance with the Act of March 3, 1931 (commonly

2 known as the Davis-Bacon Act); as amended (40

3 U.S.C. 276a–276a–5). The Secretary of Labor shall

4 have the authority and functions set forth in reorga5 nization plan of No. 14 of 1950 (15 FR 3176; 64

6 Stat. 1267) and section 2 of the Act of June 1,

7 1934 (commonly known as the Copeland Anti-Kick8 back Act) as amended (40 U.S.C. 276c, 48 Stat.

9 948).

10 SEC. 1610. TECHNICAL ASSISTANCE.

11 The comprehensive regional centers established under

12 section 2203 of the Elementary and Secondary Education

13 Act of 1965 may provide assistance in the repair, renova14 tion, alteration, and construction of public elementary or

15 secondary school libraries, media centers, or facilities to

16 eligible local educational agencies receiving assistance

17 under this subtitle.

18 SEC. 1611. FEDERAL ASSESSMENT.

19 The Secretary shall reserve not more than 1 percent

20 of funds appropriated pursuant to the authority of section

21 1605(b)—

22 (1) to collect such data as the Secretary deter23 mines necessary at the school, local, and State levels;

24 and
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1 (2) to conduct studies and evaluations, includ2 ing national studies and evaluations, in order to—

3 (A) monitor the progress of projects sup4 ported with funds provided under this subtitle;

5 and

6 (B) evaluate the state of American public

7 elementary and secondary school libraries,

8 media centers, and facilities; and

9 (3) to report to the Congress by July 1, 1997,

10 regarding the findings of the studies and evaluations

11 described in paragraph (2).

12 Subtitle H—Renewable Energy and

13 Energy Efficiency

14 SEC. 1701. RENEWABLE ENERGY.

15 In addition to any amounts otherwise authorized to

16 be appropriated, there are authorized to be appropriated

17 to the Secretary of Energy $250,000,000 for fiscal year

18 1995 and $250,000,000 for fiscal year 1996 for renewable

19 energy research, development, and demonstration pro20 grams described in section 4(c) of the Renewable Energy

21 and Efficiency Technology Competitiveness Act of 1989

22 (42 U.S.C. 12003(c)).

23 SEC. 1702. ENERGY EFFICIENCY.

24 (a) FEDERAL ENERGY EFFICIENCY FUND.—Section

25 546(b)(4) of the National Energy Conservation Policy Act
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1 (42 U.S.C. 8256(b)(4)) is amended by striking

2 ‘‘$50,000,000 for fiscal year 1995’’ and inserting in lieu

3 thereof ‘‘$200,000,000 for fiscal year 1995, $125,000,000

4 for fiscal year 1996’’.

5 (b) NEW TECHNOLOGY DEMONSTRATION PRO6 GRAM.—Section 549(f) of the National Energy Conserva7 tion Policy Act (42 U.S.C. 8258a(f)) is amended by strik8 ing ‘‘, 1994, and 1995’’ and inserting in lieu thereof ‘‘and

9 1994, $300,000,000 for fiscal year 1995, and

10 $375,000,000 for fiscal year 1996’’.

11 TITLE II—HUMAN CAPITAL

12 INVESTMENT

13 Subtitle A—Job Training

14 SEC. 2001. HUMAN CAPITAL INVESTMENTS IN JOB TRAIN15 ING.

16 (a) ESTABLISHMENT OF ALLIED HEALTH PROFES17 SIONAL JOB TRAINING PROGRAM UNDER THE JOB TRAIN18 ING PARTNERSHIP ACT.—

19 (1) IN GENERAL.—Part D of title IV of the Job

20 Training Partnership Act (29 U.S.C. 1731 et seq.)

21 is amended by adding at the end the following new

22 section:
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1 ‘‘SEC. 457. ALLIED HEALTH PROFESSIONAL JOB TRAINING

2 PROGRAM.

3 ‘‘(a) AUTHORIZATION.—The Secretary shall provide

4 grants to institutions of higher education to establish pro5 grams to provide job training assistance to at-risk youths

6 and long-term welfare recipients to enable such youths and

7 recipients to become allied health professionals.

8 ‘‘(b) APPLICATION.—The Secretary may provide a

9 grant to an institution of higher education under sub10 section (a) only if such institution submits to the Sec11 retary an application which contains such information as

12 the Secretary may reasonably require.

13 ‘‘(c) USE OF AMOUNTS.—An institution of higher

14 education shall use amounts received from a grant under

15 subsection (a) to establish a program to provide job train16 ing assistance to at-risk youths and long-term welfare re17 cipients to enable such youths and recipients to become

18 allied health professionals. In carrying out such program,

19 the institution of higher education shall meet the following

20 requirements:

21 ‘‘(1) The institution will consult with represent22 atives from labor unions in carrying out the program

23 and will allow such representatives to assist such in24 stitution in the recruitment and orientation of indi25 viduals for the program.
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1 ‘‘(2) The institution will disseminate informa2 tion relating to the program in areas of substantial

3 unemployment where the need for increased access

4 to health care services is the greatest.

5 ‘‘(3) In accepting individuals into the program,

6 the institution will give priority to individuals from

7 underrepresented populations.

8 ‘‘(4) To the extent practicable, the training of

9 an individual in the program will not exceed 2 years.

10 ‘‘(5) To the extent practicable, the institution

11 will provide individuals in the program with services

12 leading to guaranteed job placement in the allied

13 health profession.

14 ‘‘(d) DEFINITIONS.—For purposes of this section, the

15 following definitions apply:

16 ‘‘(1) ALLIED HEALTH PROFESSIONALS.—The

17 term ‘allied health professionals’ has the meaning

18 given such term in section 799(5) of the Public

19 Health Service Act (42 U.S.C. 295p(5)).

20 ‘‘(2) FAMILY ADJUSTED INCOME.—

21 ‘‘(A) IN GENERAL.—Except as provided in

22 subparagraph (C), the term ‘family adjusted in23 come’ means, with respect to a family, the sum

24 of the adjusted incomes (as defined in subpara25 graph (B)) for all members of the family.
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1 ‘‘(B) ADJUSTED INCOME.—In subpara2 graph (A), the term ‘adjusted income’ means,

3 with respect to an individual, adjusted gross in4 come (as defined in section 62(a) of the Inter5 nal Revenue Code of 1986)—

6 ‘‘(i) determined without regard to sec7 tions 135, 162(l), 911, 931, and 933 of

8 such Code, and

9 ‘‘(ii) increased by the amount of inter10 est received or accrued by the individual

11 which is exempt from tax.

12 ‘‘(C) PRESENCE OF ADDITIONAL DEPEND13 ENTS.—At the option of an individual, a family

14 may include (and not be required to separate

15 out) the income of other individuals who are

16 claimed as dependents of the family for income

17 tax purposes, but such individuals shall not be

18 counted as part of the family for purposes of

19 determining the size of the family.

20 ‘‘(3) INSTITUTION OF HIGHER EDUCATION.—

21 The term ‘institution of higher education’ means an

22 institution of higher education (as such term is de23 fined in section 481 of the Higher Education Act of

24 1965 (20 U.S.C. 1088)) which—
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1 ‘‘(A) continues to meet the eligibility and

2 certification requirements under title IV of such

3 Act (20 U.S.C. 1070 et seq.); and

4 ‘‘(B) has the capacity to train individuals

5 to become allied health professionals, as deter6 mined by the Secretary.

7 ‘‘(4) LONG-TERM WELFARE RECIPIENT DE8 FINED.—The term ‘long-term welfare recipient’

9 means an individual who, in accordance with rules

10 established by the Secretary, is identified as—

11 ‘‘(A) having been substantially unemployed

12 over a consecutive period of at least 2 years im13 mediately preceding the date of application for

14 the program;

15 ‘‘(B) having, during such period, been re16 ceiving (or a member of a household that has

17 been receiving) benefits under one or more Fed18 eral or State welfare programs identified under

19 such rules, including the AFDC program, the

20 SSI program, and medicaid; and

21 ‘‘(C) having family adjusted income that

22 does not exceed 200 percent of the applicable

23 poverty level for the class of enrollment in24 volved.
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1 ‘‘(5) UNDERREPRESENTED POPULATIONS.—

2 The term ‘underrepresented populations’ includes

3 minorities, the poor, and persons with limited Eng4 lish proficiency.’’.

5 (2) AUTHORIZATION OF APPROPRIATIONS.—

6 Section 3(c) of such Act (29 U.S.C. 1502(c)) is

7 amended—

8 (A) in paragraph (1), by striking ‘‘There

9 are authorized’’ and inserting ‘‘Except as pro10 vided in paragraph (6), there are authorized’’;

11 and

12 (B) by adding at the end the following new

13 paragraph:

14 ‘‘(6) In addition to amounts authorized to be appro15 priated under paragraph (1), there are authorized to be

16 appropriated to carry out section 457 $2,000,000,000 for

17 each of the fiscal years 1995 and 1996 and such sums

18 as may be necessary for fiscal year 1997.’’.

19 (3) CONFORMING AMENDMENT.—The table of

20 contents of such Act is amended by inserting after

21 the item relating to section 456 the following new

22 item:

‘‘Sec. 457. Allied health professional job training program.’’.

23 (4) EFFECTIVE DATE.—The amendments made

24 by this subsection shall take effect on October 1,
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1 1994, or the date of the enactment of this Act,

2 whichever occurs later.

3 (b) INCREASE IN AUTHORIZATION OF APPROPRIA4 TIONS FOR CERTAIN YOUTH JOB TRAINING PROGRAMS.—

5 (1) YOUTH FAIR CHANCE PROGRAM.—Section

6 3(c)(3) of the Job Training Partnership Act (29

7 U.S.C. 1502(c)(3)) is amended by striking

8 ‘‘$100,000,000’’ and all that follows through

9 ‘‘1997’’ and inserting ‘‘$700,000,000 for each of the

10 fiscal years 1995 and 1996 and such sums as may

11 be necessary for fiscal year 1997’’.

12 (2) YOUTHBILD PROGRAM.—Section 402 of the

13 Homeownership and Opportunity Through HOPE

14 Act (42 U.S.C. 12870) is amended—

15 (1) by redesignating subsection (c) as sub16 section (d); and

17 (2) by inserting after subsection (b) the follow18 ing new subsection:

19 ‘‘(c) YOUTHBILD PROGRAM.—

20 ‘‘(1) IN GENERAL.—There are authorized to be

21 appropriated for activities authorized under subtitle

22 D $400,000,000 for each of the fiscal years 1995

23 and 1996 and such sums as may be necessary for

24 fiscal year 1997.
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1 ‘‘(2) AVAILABILITY.—Amounts appropriated

2 pursuant to the authorization of appropriations

3 under paragraph (1) are authorized to remain avail4 able until expended.’’.

5 Subtitle B—Education

6 SEC. 2101. EDUCATIONAL PERSONNEL.

7 (a) ADULT EDUCATION.—Section 313 of the Adult

8 Education Act is amended by striking ‘‘1995’’ and insert9 ing ‘‘and $760,000,000 for each of the fiscal years 1995

10 and 1996’’.

11 (b) ELEMENTARY AND SECONDARY EDUCATION.—

12 Section 1502 of the Elementary and Secondary Education

13 Act is amended—

14 (1) by striking ‘‘and’’; and

15 (2) by inserting ‘‘$2,456,000,000 for each of

16 the fiscal years 1995 and 1996,’’ after ‘‘1993,’’.

17 Subtitle C—Head Start

18 SEC. 2201. AMENDMENTS TO THE HEAD START ACT.

19 Section 629(a) of the Head Start Act (42 U.S.C.

20 9834(a)) is amended—

21 (1) by striking ‘‘1993, and’’ and inserting

22 ‘‘1993,’’, and

23 (2) by inserting ‘‘, $11,660,000 for fiscal year

24 1995, and $15,660,000 for fiscal year 1996’’ before

25 the period at the end.
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1 Subtitle D—Programs Under

2 Public Health Service Act

3 CHAPTER 1—FUNDING INITIATIVE FOR

4 PROGRAMS PROVIDING HEALTH

5 SERVICES

6 SEC. 2301. FUNDING INITIATIVE.

7 (a) COMMUNITY HEALTH CENTERS.—In addition to

8 any other authorizations of appropriations that are avail9 able for the purpose of carrying out section 330 of the

10 Public Health Service Act, there are authorized to be ap11 propriated for such purpose $200,000,000 for fiscal year

12 1995.

13 (b) MIGRANT HEALTH CENTERS.—In addition to any

14 other authorizations of appropriations that are available

15 for the purpose of carrying out section 329 of the Public

16 Health Service Act, there are authorized to be appro17 priated for such purpose $100,000,000 for fiscal year

18 1995.

19 (c) HEALTH CARE FOR THE HOMELESS.—In addi20 tion to any other authorizations of appropriations that are

21 available for the purpose of carrying out section 340 of

22 the Public Health Service Act, there are authorized to be

23 appropriated for such purpose $100,000,000 for fiscal

24 year 1995.
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1 (d) PREVENTIVE SERVICES REGARDING TUBER2 CULOSIS.—In addition to any other authorizations of ap3 propriations that are available for the purpose of carrying

4 out section 317E of the Public Health Service Act (as

5 added by section 301 of Public Law 103–183; 107 Stat.

6 2233), there are authorized to be appropriated for such

7 purpose $150,000,000 for fiscal year 1995.

8 (e) PREVENTIVE SERVICES REGARDING BREAST AND

9 CERVICAL CANCER.—In addition to any other authoriza10 tions of appropriations that are available for the purpose

11 of carrying out the program under section 1501 of the

12 Public Health Service Act, there are authorized to be ap13 propriated for such purpose $120,000,000 for fiscal year

14 1995.

15 (f) PREVENTIVE SERVICES REGARDING LEAD EXPO16 SURE.—In addition to any other authorizations of appro17 priations that are available for the purpose of carrying out

18 section 317A of the Public Health Service Act, there are

19 authorized to be appropriated for such purpose

20 $16,000,000 for fiscal year 1995.

21 (g) PREVENTIVE SERVICES REGARDING HIV DIS22 EASE.—In addition to any other authorizations of appro23 priations that are available for the purpose of carrying out

24 under the Public Health Service Act programs to prevent

25 infection with the human immunodeficiency virus, there
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1 are authorized to be appropriated for such purpose

2 $40,000,000 for fiscal year 1995.

3 (h) IMMUNIZATION PROGRAM.—In addition to any

4 other authorizations of appropriations that are available

5 for the purpose of carrying out the immunization program

6 under section 317(j) of the Public Health Service Act,

7 there are authorized to be appropriated for such purpose

8 $200,000,000 for fiscal year 1995.

9 (i) CANCER REGISTRIES.—In addition to any other

10 authorizations of appropriations that are available for the

11 purpose of carrying out the program for cancer registries

12 under section 399H of the Public Health Service Act,

13 there are authorized to be appropriated for such purpose

14 $13,000,000 for fiscal year 1995.

15 (j) PREVENTIVE SERVICES REGARDING PROSTATE

16 CANCER.—In addition to any other authorizations of ap17 propriations that are available for the purpose of carrying

18 out section 317D of the Public Health Service Act, there

19 are authorized to be appropriated for such purpose

20 $4,000,000 for fiscal year 1995.

21 (k) COMPREHENSIVE SCHOOL HEALTH EDU22 CATION.—In addition to any other authorizations of ap23 propriations that are available for the purpose of carrying

24 out under the Public Health Service Act a program to pro25 vide comprehensive health education to school children,
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1 there are authorized to be appropriated for such purpose

2 $40,000,000 for fiscal year 1995.

3 (l) PREVENTION AND CONTROL OF SEXUALLY

4 TRANSMITTED DISEASES.—In addition to any other au5 thorizations of appropriations that are available for the

6 purpose of carrying out section 318 of the Public Health

7 Service Act, there are authorized to be appropriated for

8 such purpose $10,000,000 for fiscal year 1995.

9 (m) PREVENTION AND CONTROL OF DIABETES.—In

10 addition to any other authorizations of appropriations that

11 are available for the purpose of carrying out under the

12 Public Health Service Act a program for the prevention

13 and control of diabetes, there are authorized to be appro14 priated for such purpose $20,000,000 for fiscal year 1995.

15 (n) CHILD DAY CARE HEALTH AND SAFETY.—In ad16 dition to any other authorizations of appropriations that

17 are available for the purpose of carrying out under the

18 Public Health Service Act a program for child day care

19 health and safety, there are authorized to be appropriated

20 for such purpose $5,000,000 for fiscal year 1995.

21 (o) PREVENTION AND CONTROL OF INJURIES.—In

22 addition to any other authorizations of appropriations that

23 are available for the purpose of carrying out part J of

24 title III of the Public Health Service Act, there are author-
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1 ized to be appropriated for such purpose $5,000,000 for

2 fiscal year 1995.

3 (p) ASTHMA.—In addition to any other authoriza4 tions of appropriations that are available for the purpose

5 of carrying out under the Public Health Service Act a pro6 gram regarding asthma, there are authorized to be appro7 priated for such purpose $5,000,000 for fiscal year 1995.

8 (q) ENVIRONMENTAL HEALTH.—

9 (1) URGENT THREAT TO PUBLIC HEALTH.—In

10 addition to any other authorizations of appropria11 tions that are available for the purpose of carrying

12 out under the Public Health Service Act a program

13 to respond to urgent environmental threats to the

14 public health, there are authorized to be appro15 priated for such purpose $32,000,000 for fiscal year

16 1995.

17 (2) ACTIVITIES REGARDING BORDER WITH

18 MEXICO.—In addition to any other authorizations of

19 appropriations that are available for the purpose of

20 carrying out under the Public Health Service Act a

21 program to provide environmental services regarding

22 the health of individuals in the United States in the

23 vicinity of the international border with Mexico,

24 there are authorized to be appropriated for such

25 purpose $10,000,000 for fiscal year 1995.
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1 (r) BLOCK GRANTS FOR COMMUNITY MENTAL

2 HEALTH SERVICES.—In addition to any other authoriza3 tions of appropriations that are available for the purpose

4 of carrying out subpart I of part B of title XIX of the

5 Public Health Service Act, there are authorized to be ap6 propriated for such purpose $50,000,000 for fiscal year

7 1995.

8 (s) BLOCK GRANTS FOR PREVENTION AND TREAT9 MENT OF SUBSTANCE ABUSE.—In addition to any other

10 authorizations of appropriations that are available for the

11 purpose of carrying out subpart II of part B of title XIX

12 of the Public Health Service Act, there are authorized to

13 be appropriated for such purpose $50,000,000 for fiscal

14 year 1995.

15 (t) BLOCK GRANTS FOR PREVENTIVE HEALTH

16 SERVICES.—In addition to any other authorizations of ap17 propriations that are available for the purpose of carrying

18 out part A of title XIX of the Public Health Service Act,

19 there are authorized to be appropriated for such purpose

20 $30,000,000 for fiscal year 1995.

21 (u) SCHOLARSHIP AND LOAN REPAYMENT PRO22 GRAMS OF NATIONAL HEALTH SERVICE CORPS.—In addi23 tion to any other authorizations of appropriations that are

24 available for the purpose of contracts under sections 338A

25 and 338B of the Public Health Service Act, there are au-
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1 thorized to be appropriated for such purpose

2 $100,000,000 for fiscal year 1995.

3 (v) SOCIAL SECURITY ACT; MATERNAL AND CHILD

4 HEALTH BLOCK GRANT.—In addition to any other au5 thorizations of appropriations that are available for the

6 purpose of carrying out title V of the Social Security Act,

7 there are authorized to be appropriated for such purpose

8 $100,000,000 for fiscal year 1995.

9 CHAPTER 2—COMMUNITY HEALTH

10 ADVISOR PROGRAM

11 SEC. 2311. SHORT TITLE.

12 This chapter may be cited as the ‘‘National Commu13 nity Health Advisor Act’’.

14 SEC. 2312. FINDINGS.

15 The Congress finds the following:

16 (1) Poverty, geographic isolation, cultural dif17 ferences, lack of transportation, low literacy, lack of

18 access to services and further difficulties resulting

19 from a lack of continuity of care, are barriers for

20 millions of low-income and underserved Americans in

21 the current health care delivery system.

22 (2) The Public Health Service has determined

23 that many health problems are rooted in poverty and

24 hit hardest at those least able to protect themselves.
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1 (3) The Public Health Service has established

2 goals and objectives regarding improvements in the

3 health of the public by the year 2000. An evaluation

4 by the Service, entitled ‘‘Health United States 1992

5 and Healthy People 2000 Review’’, illustrates the

6 acute access problem faced by rural areas and the

7 inner cities. The evaluation cites the fact that sub8 urbs have the lowest death rates, while death rates

9 in rural counties are 12 percent higher and in large

10 core metropolitan counties, 19 percent higher.

11 (4) Discussions of health care reform focus al12 most exclusively on questions of how to extend

13 health insurance to the Nation’s 35–40 million unin14 sured and make services available while simulta15 neously bringing medical costs under control; how16 ever, it is imperative to correct the fundamental and

17 deep-rooted obstacles that low-income urban and

18 rural Americans confront when trying to access med19 ical care and preventive health services. For exam20 ple, in 1991, 19 million American women qualified

21 for mammography screening benefits through Medi22 care; however, only 670,000 (or less than 3 percent)

23 took advantage of this benefit.

24 (5) People who are local, indigenous members

25 and residents of underserved communities are
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1 uniquely knowledgeable about their populations’

2 needs; where such individuals are already serving as

3 community health advisors, they communicate to

4 health and social service providers the needs of com5 munity members, provide quality health promotion

6 and disease prevention information to the commu7 nity and serve as the crucial link between their com8 munities and providers to increase utilization of

9 available preventive health services and to reach out

10 to communities to increase the effectiveness of the

11 health care delivery system, reduce preventable mor12 bidity and mortality, and improve the quality of life.

13 SEC. 2313. FORMULA GRANTS REGARDING COMMUNITY

14 HEALTH ADVISOR PROGRAMS.

15 (a) FORMULA GRANTS.—

16 (1) IN GENERAL.—In the case of each State (or

17 entity designated by a State under subsection (b))

18 that submits to the Secretary an application in ac19 cordance with section 2316 for a fiscal year, the

20 Secretary of Health and Human Services, acting

21 through the Director of the Centers for Disease

22 Control and Prevention and in coordination with the

23 heads of the agencies specified in paragraph (2),

24 shall make an award of financial assistance to the

25 State or entity for the development and operation of
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1 community health advisor programs under section

2 2314(b). The award shall consist of the allotment

3 determined under section 2317 with respect to the

4 State, subject to section 2322(b).

5 (2) COORDINATION WITH OTHER AGENCIES.—

6 The agencies referred to in paragraph (1) regarding

7 coordination are the Health Resources and Services

8 Administration, the National Institutes of Health,

9 and the Substance Abuse and Mental Health Serv10 ices Administration.

11 (b) DESIGNATED ENTITIES.—With respect to the

12 State involved, an entity other than the State may receive

13 an award under subsection (a) only if the entity—

14 (1) is a public or nonprofit private academic or15 ganization (or other public or nonprofit private en16 tity); and

17 (2) has been designated by the State to carry

18 out the purpose described in such subsection in the

19 State and to receive amounts under such subsection

20 in lieu of the State.

21 (c) ROLE OF STATE AGENCY FOR PUBLIC

22 HEALTH.—A funding agreement for an award under sub23 section (a) is that—

24 (1) if the applicant is a State, the award will

25 be administered by the State agency with the prin-
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1 cipal responsibility for carrying out public health

2 programs; and

3 (2) if the applicant is an entity designated

4 under subsection (b), the award will be administered

5 in consultation with such State agency.

6 (d) STATEWIDE RESPONSIBILITIES; LIMITATION ON

7 EXPENDITURES.—

8 (1) STATEWIDE RESPONSIBILITIES.—A funding

9 agreement for an award under subsection (a) is that

10 the applicant involved will—

11 (A) operate a clearinghouse to maintain

12 and disseminate information on community

13 health advisor programs (and similar programs)

14 in the State, including information on develop15 ing and operating such programs, on training

16 individuals to participate in the programs, and

17 on evaluation of the programs;

18 (B) provide to community health advisor

19 programs in the State technical assistance in

20 training community health advisors under sec21 tion 2315(g)(1); and

22 (C) coordinate the activities carried out in

23 the State under the award, including coordina24 tion between the various community health ad25 visor programs and coordination between such
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1 programs and related activities of the State and

2 of other public or private entities.

3 (2) LIMITATION.—A funding agreement for an

4 award under subsection (a) is that the applicant in5 volved will not expend more than 15 percent of the

6 award in the aggregate for carrying out paragraph

7 (1) and for the expenses of administering the award

8 with respect to the State involved, including the

9 process of receiving payments from the Secretary

10 under the award, allocating the payments among the

11 entities that are to develop and operate the commu12 nity health advisor programs involved, and monitor13 ing compliance with the funding agreements made

14 under this chapter by the applicant.

15 SEC. 2314. REQUIREMENTS REGARDING COMMUNITY

16 HEALTH ADVISOR PROGRAMS.

17 (a) PURPOSE OF AWARD; HEALTHY PEOPLE 2000

18 OBJECTIVES.—

19 (1) IN GENERAL.—Subject to paragraph (2), a

20 funding agreement for an award under section 2313

21 for an applicant is that the purpose of the award is,

22 through community health advisor programs under

23 subsection (b), to assist the State involved in attain24 ing the Healthy People 2000 Objectives (as defined

25 in subsection (d).
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1 (2) AUTHORITY REGARDING SELECTION OF PRI2 ORITY OBJECTIVES.—With respect to compliance

3 with the agreement made under paragraph (1), an

4 applicant receiving an award under section 2313

5 may, from among the various Healthy People 2000

6 Objectives, select one or more Objectives to be given

7 priority in the operation of a community health advi8 sor program of the applicant, subject to the appli9 cant selecting such priorities in consultation with the

10 entity that is to carry out the program.

11 (b) REQUIREMENTS FOR PROGRAMS.—

12 (1) IN GENERAL.—A funding agreement for an

13 award under section 2313 for an applicant is that,

14 in expending the award, the purpose described in

15 subsection (a)(1) will be carried out in accordance

16 with the following:

17 (A) For each community for which the

18 purpose is to be carried out, the applicant will

19 establish a program in accordance with this

20 subsection.

21 (B) The program will be carried out in a

22 community only if the applicant has, under sec23 tion 2315(a), identified the community as hav24 ing a significant need for the program.
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1 (C) The program will be operated by a

2 public or nonprofit private entity with experi3 ence in providing health or health-related social

4 services to individuals who are underserved with

5 respect to such services.

6 (D) The services of the program, as speci7 fied in paragraph (2), will be provided prin8 cipally by community health advisors (as de9 fined in subsection (d)).

10 (2) AUTHORIZED PROGRAM SERVICES.—For

11 purposes of paragraph (1)(D), the services specified

12 in this paragraph for a program are as follows:

13 (A) The program will collaborate with

14 health care providers and related entities in

15 order to facilitate the provision of health serv16 ices and health-related social services (including

17 collaborating with local health departments,

18 community health centers, migrant health cen19 ters, rural health clinics, hospitals, physicians

20 and nurses, providers of health education, and

21 providers of social services).

22 (B) The program will provide public edu23 cation on health promotion and disease preven24 tion and facilitate the use of available health

25 services and health-related social services.
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1 (C) The program will provide health-relat2 ed counseling.

3 (D) The program will provide referrals for

4 available health services and health-related so5 cial services.

6 (E) For the purpose of increasing the ca7 pacity of individuals to utilize health services

8 and health-related social services under Federal,

9 State, and local programs, the following condi10 tions will be met:

11 (i) The program will assist individuals

12 in establishing eligibility under the pro13 grams and in receiving the services or

14 other benefits of the programs.

15 (ii) The program will provide such

16 other services as the Secretary determines

17 to be appropriate, which services may in18 clude (but are not limited to) transpor19 tation and translation services.

20 (F) The program will provide outreach

21 services to inform the community of the avail22 ability of the services of the program.

23 (c) PRIORITY FOR MEDICALLY UNDERSERVED COM24 MUNITIES.—A funding agreement for an award under sec25 tion 2313 is that the applicant involved will give priority
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1 to developing and operating community health advisor

2 programs for medically underserved communities.

3 (d) CERTAIN DEFINITIONS.—

4 (1) COMMUNITY HEALTH ADVISOR.—For pur5 poses of this chapter, the term ‘‘community health

6 advisor’’ means an individual—

7 (A) who has demonstrated the capacity to

8 carry out one or more of the authorized pro9 gram services;

10 (B) who, for not less than 1 year, has been

11 a resident of the community in which the com12 munity health advisor program involved is to be

13 operated; and

14 (C) is a member of a socioeconomic group

15 to be served by the program.

16 (2) HEALTHY PEOPLE 2000 OBJECTIVES.—For

17 purposes of this chapter, the term ‘‘Healthy People

18 2000 Objectives’’ means the objectives established by

19 the Secretary toward the goals of increasing the

20 span of healthy life, reducing health disparities

21 among various populations, and providing access to

22 preventive services, which objectives apply to the

23 health status of the population of the United States

24 for the year 2000.
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1 (3) MEDICALLY UNDERSERVED COMMUNITY.—

2 For purposes of this chapter, the term ‘‘medically

3 underserved community’’ means—

4 (A) a community that has a substantial

5 number of individuals who are members of a

6 medically underserved population, as defined in

7 section 330 of the Public Health Service Act; or

8 (B) a community a significant portion of

9 which is a health professional shortage area

10 designated under section 332 of such Act.

11 SEC. 2315. ADDITIONAL AGREEMENTS.

12 (a) IDENTIFICATION OF COMMUNITY NEEDS.—A

13 funding agreement for an award under section 2313 is

14 that the applicant involved will—

15 (1) identify the needs of the community in16 volved for the authorized program services;

17 (2) in identifying such needs, consult with

18 members of the community, with individuals and

19 programs that provide health services in the commu20 nity, and with individuals and programs that provide

21 health-related social services in the community; and

22 (3) consider such needs in carrying out a com23 munity health advisor program for the community.

24 (b) MATCHING FUNDS.—
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1 (1) IN GENERAL.—With respect to the cost of

2 carrying out a community health advisor program, a

3 funding agreement for an award under section 2313

4 is that the applicant involved will make available (di5 rectly or through donations from public or private

6 entities) non-Federal contributions toward such cost

7 in an amount that is not less than 25 percent of

8 such cost.

9 (2) DETERMINATION OF AMOUNT CONTRIB10 UTED.—

11 (A) Non-Federal contributions required in

12 paragraph (1) may be in cash or in kind, fairly

13 evaluated, including plant, equipment, or serv14 ices. Amounts provided by the Federal Govern15 ment, or services assisted or subsidized to any

16 significant extent by the Federal Government,

17 may not be included in determining the amount

18 of such non-Federal contributions.

19 (B) With respect to the State in which the

20 community health advisor program involved is

21 to be carried out, amounts provided by the

22 State in compliance with subsection (c) shall be

23 included in determining the amount of non-Fed24 eral contributions under paragraph (1).
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1 (c) MAINTENANCE OF EFFORT.—With respect to the

2 purposes for which an award under section 2313 is au3 thorized in this chapter to be expended, the Secretary may

4 make such an award only if the State involved agrees to

5 maintain expenditures of non-Federal amounts for such

6 purposes at a level that is not less than the level of such

7 expenditures maintained by the State for the fiscal year

8 preceding the first fiscal year for which such an award

9 is made with respect to the State.

10 (d) CULTURAL CONTEXT OF SERVICES.—A funding

11 agreement for an award under section 2313 for an appli12 cant is that the services of the community health advisor

13 program involved will be provided in the language and cul14 tural context most appropriate for the individuals served

15 by the program.

16 (e) NUMBER OF PROGRAMS PER AWARD; PROGRAMS

17 FOR URBAN AND RURAL AREAS.—A funding agreement

18 for an award under section 2313 for an applicant is that

19 the number of community health advisor programs oper20 ated in the State with the award will be determined by

21 the Secretary, except that (subject to section

22 2314(b)(1)(B)) such a program will be carried out in not

23 less than one urban area of the State, and in not less than

24 one rural area of the State.
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1 (f) ONGOING SUPERVISION OF ADVISORS.—A fund2 ing agreement for an award under section 2313 is that

3 the applicant involved will ensure that each community

4 health advisor program operated with the award provides

5 for the ongoing supervision of the community health advi6 sors of the program.

7 (g) CERTAIN EXPENDITURES.—

8 (1) TRAINING; CONTINUING EDUCATION.—

9 Funding agreements for an award under section

10 2313 include the following:

11 (A) The applicant involved will ensure

12 that, for each community health advisor pro13 gram operated with the award, a program is

14 carried out to train community health advisors

15 to provide the authorized program services, in16 cluding practical experiences in providing serv17 ices for health promotion and disease preven18 tion.

19 (B) The program of training will provide

20 for the continuing education of the community

21 health advisors.

22 (C) Not more than 15 percent of the

23 award will be expended for the program of

24 training.
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1 (2) COMPENSATION.—With respect to compli2 ance with the agreements made under this chapter,

3 the purposes for which an award under section 2313

4 may be expended include providing compensation for

5 the services of community health advisors.

6 (h) REPORTS TO SECRETARY; ASSESSMENT OF EF7 FECTIVENESS.—Funding agreements for an award under

8 section 2313 for an applicant include the following:

9 (1) The applicant will ensure that, for each fis10 cal year for which a community health advisor pro11 gram receives amounts from the award, the program

12 will prepare a report describing the activities of the

13 program for such year, including—

14 (A) a specification of the number of indi15 viduals served by the program;

16 (B) a specification of the entities with

17 which the program has collaborated in carrying

18 out the purpose described in section 2314(a)(1);

19 and

20 (C) an assessment of the extent of the ef21 fectiveness of the program in carrying out such

22 purpose.

23 (2) Such reports will include such additional in24 formation regarding the applicant and the programs

25 as the Secretary may require.
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1 (3) The applicant will prepare the reports as a

2 single document and will submit the document to the

3 Secretary not later than February 1 of the fiscal

4 year following the fiscal year for which the reports

5 were prepared.

6 SEC. 2316. APPLICATION FOR ASSISTANCE; STATE PLAN.

7 For purposes of section 2313, an application is in ac8 cordance with this section if—

9 (1) the application is submitted not later than

10 the date specified by the Secretary;

11 (2) the application contains each funding agree12 ment described in this chapter;

13 (3) the application contains a State plan de14 scribing the purposes for which the award is to be

15 expended in the State, including a description of the

16 manner in which the applicant will comply with each

17 such funding agreement; and

18 (4) the application is in such form, is made in

19 such manner, and contains such agreements, assur20 ances, and information as the Secretary determines

21 to be necessary to carry out this chapter.

22 SEC. 2317. DETERMINATION OF AMOUNT OF ALLOTMENT.

23 (a) IN GENERAL.—For purposes of section 2313, the

24 allotment under this section with respect to a State for

25 a fiscal year is the greater of—
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1 (1) the sum of the respective amounts deter2 mined for the State under subsection (b) and sub3 section (c); and

4 (2) $500,000.

5 (b) AMOUNT RELATING TO POPULATION.—For pur6 poses of subsection (a), the amount determined under this

7 subsection is the product of—

8 (1) an amount equal to 50 percent of the

9 amount appropriated under section 2322 for the fis10 cal year and available for awards under section

11 2313; and

12 (2) the percentage constituted by the ratio of—

13 (A) the number of individuals residing in

14 the State involved; to

15 (B) the sum of the respective amounts de16 termined for each State under subparagraph

17 (A).

18 (c) AMOUNT RELATING TO POVERTY LEVEL.—For

19 purposes of subsection (a), the amount determined under

20 this subsection is the product of—

21 (1) the amount determined under subsection

22 (b)(1); and

23 (2) the percentage constituted by the ratio of—

24 (A) the number of individuals residing in

25 the State whose income is at or below an
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1 amount equal to 200 percent of the official pov2 erty line; to

3 (B) the sum of the respective amounts de4 termined for each State under subparagraph

5 (A).

6 SEC. 2318. QUALITY ASSURANCE; COST-EFFECTIVENESS.

7 The Secretary shall establish guidelines for assuring

8 the quality of community health advisor programs (includ9 ing quality in the training of community health advisors)

10 and for assuring the cost-effectiveness of the programs.

11 A funding agreement for an award under section 2313 is

12 that the applicant involved will carry out such programs

13 in accordance with the guidelines.

14 SEC. 2319. EVALUATIONS; TECHNICAL ASSISTANCE.

15 (a) EVALUATIONS.—The Secretary shall conduct

16 evaluations of community health advisor programs, and

17 may disseminate information developed as result of the

18 evaluations. In conducting such evaluations, the Secretary

19 shall determine whether the programs are in compliance

20 with the guidelines established under section 2318.

21 (b) TECHNICAL ASSISTANCE.—The Secretary may

22 provide technical assistance to recipients of awards under

23 section 2313 with respect to the planning, development,

24 and operation of community health advisor programs.
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1 (c) GRANTS AND CONTRACTS.—The Secretary may

2 carry out this section directly or through grants, coopera3 tive agreements, or contracts.

4 (d) LIMITATION ON EXPENDITURES.—Of the

5 amounts appropriated under section 2322 for a fiscal year,

6 the Secretary may reserve not more than 10 percent for

7 carrying out this section.

8 SEC. 2320. RULE OF CONSTRUCTION REGARDING PRO9 GRAMS OF INDIAN HEALTH SERVICE.

10 This chapter may not be construed as requiring the

11 Secretary to modify or terminate the program carried out

12 by the Director of the Indian Health Service and des13 ignated by such Director as the Community Health Rep14 resentative Program. The Secretary shall ensure that sup15 port for such Program is not supplanted by awards under

16 section 2313. In communities in which both such Program

17 and a community health advisor program are being carried

18 out, the Secretary shall ensure that the community health

19 advisor program works in cooperation with, and as a com20 plement to, the Community Health Representative Pro21 gram.

22 SEC. 2321. DEFINITIONS.

23 For purposes of this chapter:
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1 (1) The term ‘‘authorized program services’’,

2 with respect to a community health advisor program,

3 means the services specified in section 2314(b)(2).

4 (2) The term ‘‘community health advisor’’ has

5 the meaning given such term in section 2314(d).

6 (3) The term ‘‘community health advisor pro7 gram’’ means a program carried out under section

8 2314(b).

9 (4) The term ‘‘financial assistance’’, with re10 spect to an award under section 2313, means a

11 grant, cooperative agreement, or a contract.

12 (5) The term ‘‘funding agreement’’ means an

13 agreement required as a condition of receiving an

14 award under section 2313.

15 (6) The term ‘‘Healthy People 2000 Objectives’’

16 has the meaning given such term in section 2314(d).

17 (7) The term ‘‘medically underserved commu18 nity’’ has the meaning given such term in section

19 2314(d).

20 (8) The term ‘‘official poverty line’’ means the

21 official poverty line established by the Director of

22 the Office of Management and Budget and revised

23 by the Secretary in accordance with section 673(2)

24 of the Omnibus Budget Reconciliation Act of 1981,
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1 which poverty line is applicable the size of the family

2 involved.

3 (9) The term ‘‘Secretary’’ means the Secretary

4 of Health and Human Services.

5 (10) The term ‘‘State’’ means each of the sev6 eral States, the District of Columbia, and each of

7 the Commonwealth of Puerto Rico, American

8 Samoa, Guam, the Commonwealth of the Northern

9 Mariana Islands, the Virgin Islands, and the Trust

10 Territory of the Pacific Islands.

11 (11) The term ‘‘State involved’’, with respect to

12 an applicant for an award under section 2313,

13 means the State in which the applicant is to carry

14 out a community health advisor program.

15 SEC. 2322. FUNDING.

16 (a) AUTHORIZATION OF APPROPRIATIONS.—For the

17 purpose of carrying out this chapter, there is authorized

18 to be appropriated $100,000,000 for each of the fiscal

19 years 1995 through 2000.

20 (b) EFFECT OF INSUFFICIENT APPROPRIATIONS FOR

21 MINIMUM ALLOTMENTS.—

22 (1) IN GENERAL.—If the amounts made avail23 able under subsection (a) for a fiscal year are insuf24 ficient for providing each State (or entity designated

25 by the State pursuant to section 2313, as the case
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1 may be) with an award under section 2313 in an

2 amount equal to or greater than the amount speci3 fied in section 2317(a)(2), the Secretary shall, from

4 such amounts as are made available under sub5 section (a), make such awards on a discretionary

6 basis.

7 (2) RULE OF CONSTRUCTION.—For purposes of

8 paragraph (1), awards under section 2313 are made

9 on a discretionary basis if the Secretary determines

10 which States (or entities designated by States pursu11 ant to such section, as the case may be) are to re12 ceive such awards, subject to meeting the require13 ments of this chapter for such an award, and the

14 Secretary determines the amount of such awards.

15 Title III—AMENDMENTS OF IN16 TERNAL REVENUE CODE OF

17 1986

18 Subtitle A—Reduction in Employee

19 Payroll Taxes; Credit for First20 Time Homebuyers

21 SEC. 3001. CREDIT FOR PORTION OF SOCIAL SECURITY

22 TAXES.

23 (a) GENERAL RULE.—Subpart C of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of

25 1986 (relating to refundable credits) is amended by redes-
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1 ignating section 35 as section 36 and by inserting after

2 section 34 the following new section:

3 ‘‘SEC. 35. CREDIT FOR PORTION OF SOCIAL SECURITY

4 TAXES.

5 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in6 dividual, there shall be allowed as a credit against the tax

7 imposed by this subtitle for the taxable year an amount

8 equal to 20 percent of the taxpayer’s social security taxes

9 for the taxable year.

10 ‘‘(b) LIMITATION.—The amount of the credit allow11 able under subsection (a) to any taxpayer for any taxable

12 year shall not exceed $200 ($400 in the case of a joint

13 return).

14 ‘‘(c) SOCIAL SECURITY TAXES.—For purposes of this

15 section—

16 ‘‘(1) IN GENERAL.—The term ‘social security

17 taxes’ means, with respect to any taxpayer for any

18 taxable year—

19 ‘‘(A) the amount of the taxes imposed by

20 subsections (a) and (b) of section 3101 on

21 amounts received by the taxpayer during the

22 calendar year in which the taxable year begins,

23 ‘‘(B) the amount of the taxes imposed by

24 section 3201(a) on amounts received by the tax-
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1 payer during the calendar year in which the

2 taxable year begins,

3 ‘‘(C) 50 percent of the taxes imposed by

4 subsections (a) and (b) of section 1401 on the

5 self-employment income of the taxpayer for the

6 taxable year, and

7 ‘‘(D) 50 percent of the taxes imposed by

8 section 3211(a)(1) on amounts received by the

9 taxpayer during the calendar year in which the

10 taxable year begins.

11 ‘‘(2) COORDINATION WITH SPECIAL REFUND OF

12 SOCIAL SECURITY TAXES.—The term ‘social security

13 taxes’ shall not include any taxes to the extent the

14 taxpayer is entitled to a special refund of such taxes

15 under section 6413(c).

16 ‘‘(3) SPECIAL RULE.—Any amounts paid pursu17 ant to an agreement under section 3121(l) (relating

18 to agreements entered into by American employers

19 with respect to foreign affiliates) which are equiva20 lent to the taxes referred to in paragraph (1)(A)

21 shall be treated as taxes referred to in such para22 graph.

23 ‘‘(d) YEARS TO WHICH SECTION APPLIES.—This

24 section shall only apply to taxable years beginning after

25 December 31, 1994, and before January 1, 1997.’’
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 for subpart C of part IV of subchapter A of chapter 1

3 is amended by striking the item relating to section 35 and

4 inserting the following:

‘‘Sec. 35. Credit for portion of social security taxes.

‘‘Sec. 36. Overpayments of tax.’’

5 (c) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to taxable years beginning after

7 December 31, 1994.

8 SEC. 3002. CREDIT FOR PURCHASE OF PRINCIPAL RESI9 DENCE BY FIRST-TIME HOMEBUYER.

10 (a) IN GENERAL.—Subpart A of part IV of sub11 chapter A of chapter 1 (relating to nonrefundable personal

12 credits) is amended by inserting after section 22 the fol13 lowing new section:

14 ‘‘SEC. 23. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST15 TIME HOMEBUYER.

16 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a first17 time homebuyer, there shall be allowed as a credit against

18 the tax imposed by this chapter an amount equal to 10

19 percent of the purchase price of the first principal resi20 dence purchased by the taxpayer during the eligibility pe21 riod. Except as otherwise provided in this section, such

22 credit shall be allowed for the taxable year in which such

23 residence is purchased.

24 ‘‘(b) LIMITATIONS.—
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1 ‘‘(1) MAXIMUM OVERALL CREDIT.—The credit

2 allowed by subsection (a) to the taxpayer shall not

3 exceed $6,000.

4 ‘‘(2) PHASEOUT OF CREDIT BASED ON AD5 JUSTED GROSS INCOME.—If the adjusted gross in6 come of the taxpayer for the taxable year in which

7 the residence is purchased exceeds $50,000, the

8 $6,000 amount in paragraph (1) shall be reduced

9 (but not below zero) by $100 for each $200 of such

10 excess.

11 ‘‘(c) FIRST-TIME HOMEBUYER.—For purposes of

12 this section—

13 ‘‘(1) IN GENERAL.—The term ‘first-time home14 buyer’ means any individual unless such individual

15 or such individual’s spouse had a present ownership

16 interest in any residence at any time during the 3-

17 year period ending on the date of the purchase of

18 the residence referred to in subsection (a).

19 ‘‘(2) UNMARRIED JOINT OWNERS.—An individ20 ual shall not be treated as a first-time homebuyer

21 with respect to any residence unless all the individ22 uals purchasing such residence with such individual

23 are first-time homebuyers.

24 ‘‘(3) ALLOCATION OF LIMITS.—All individuals

25 purchasing a residence shall be treated as 1 individ-
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1 ual for purposes of determining the maximum credit

2 under subsection (a); and such maximum credit, and

3 the $50,000 amount in subsection (b)(2), shall be al4 located among such individuals under regulations

5 prescribed by the Secretary.

6 ‘‘(4) CERTAIN INDIVIDUALS INELIGIBLE.—The

7 term ‘first-time homebuyer’ shall not include any in8 dividual if, on the date of the purchase of the resi9 dence, the period of time specified in section 1034(a)

10 is suspended under subsection (h) or (k) of section

11 1034 with respect to such individual.

12 ‘‘(5) CERTAIN INDIRECT INTERESTS NOT

13 TAKEN INTO ACCOUNT.—Except as provided in regu14 lations prescribed by the Secretary, an individual

15 shall not be treated as holding an interest in a resi16 dence by reason of holding an interest in a partner17 ship, S corporation, or trust.

18 ‘‘(d) OTHER DEFINITIONS.—For purposes of this

19 section—

20 ‘‘(1) ELIGIBILITY PERIOD.—

21 ‘‘(A) IN GENERAL.—The term ‘eligibility

22 period’ means the period beginning after De23 cember 31, 1994, and ending before January 1,

24 1997.
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1 ‘‘(B) BINDING CONTRACTS.—A residence

2 shall be treated as purchased during the eligi3 bility period if—

4 ‘‘(i) during the eligibility period, the

5 purchaser enters into a binding contract to

6 purchase the residence, and

7 ‘‘(ii) the purchaser purchases and oc8 cupies the residence before July 1, 1997.

9 For purposes of clause (i), a contract shall not

10 fail to be treated as binding merely because it

11 is contingent on financing or on the condition

12 of the residence.

13 ‘‘(2) PURCHASE.—The term ‘purchase’ means

14 any acquisition of property, but only if—

15 ‘‘(A) the property is not acquired from a

16 person whose relationship to the person acquir17 ing it would result in the disallowance of losses

18 under section 267 or 707(b), and

19 ‘‘(B) the basis of the property in the hands

20 of the person acquiring it is not determined—

21 ‘‘(i) in whole or in part by reference

22 to the adjusted basis of such property in

23 the hands of the person from whom ac24 quired, or
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1 ‘‘(ii) under section 1014(a) (relating

2 to property acquired from a decedent).

3 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin4 cipal residence’ has the same meaning as when used

5 in section 1034.

6 ‘‘(4) PURCHASE PRICE.—The term ‘purchase

7 price’ means the adjusted basis of the residence on

8 the date of its acquisition.

9 ‘‘(e) CARRYOVER OF UNUSED CREDIT.—

10 ‘‘(1) IN GENERAL.—If—

11 ‘‘(A) the credit allowable under subsection

12 (a) after the application of subsection (b) ex13 ceeds

14 ‘‘(B) the limitation imposed by section

15 26(a) reduced by the sum of the credits allow16 able under sections 21 and 22,

17 such excess shall be carried to the succeeding tax18 able year and shall be allowable under subsection (a)

19 for such succeeding taxable year.

20 ‘‘(2) 5-YEAR LIMIT ON CARRYFORWARD.—No

21 amount may be carried under paragraph (1) to any

22 taxable year after the 5th taxable year after the tax23 able year in which the residence is purchased.

24 ‘‘(f) RECAPTURE OF CREDIT FOR CERTAIN DISPOSI25 TIONS.—
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1 ‘‘(1) IN GENERAL.—Except as provided in para2 graphs (2) and (3), if the taxpayer disposes of prop3 erty with respect to the purchase of which a credit

4 was allowed under subsection (a) and such disposi5 tion occurs at any time within 36 months after the

6 date the taxpayer acquired the property as his prin7 cipal residence, then the tax imposed under this

8 chapter for the taxable year in which the disposition

9 occurs is increased by an amount equal to the

10 amount allowed as a credit for the purchase of such

11 property.

12 ‘‘(2) ACQUISITION OF NEW RESIDENCE.—If, in

13 connection with a disposition described in paragraph

14 (1) and within the applicable period prescribed in

15 section 1034, the taxpayer purchases a new principal

16 residence, then paragraph (1) shall not apply and

17 the tax imposed by this chapter for the taxable year

18 in which the new principal residence is purchased is

19 increased to the extent the amount of the credit that

20 could be claimed under this section on the purchase

21 of the new residence (were such residence purchased

22 during the eligibility period) is less than the amount

23 of credit claimed by the taxpayer under this section.
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1 ‘‘(3) DEATH OF OWNER; CASUALTY LOSS; IN2 VOLUNTARY CONVERSION; ETC.—Paragraph (1)

3 shall not apply to—

4 ‘‘(A) a disposition of a residence made on

5 account of the death of any individual having a

6 legal or equitable interest therein occurring dur7 ing the 36-month period referred to in para8 graph (1),

9 ‘‘(B) a disposition of the old residence if it

10 is substantially or completely destroyed by a

11 casualty described in section 165(c)(3) or

12 compulsorily or involuntarily converted (within

13 the meaning of section 1033(a)), or

14 ‘‘(C) a disposition pursuant to a settlement

15 in a divorce or legal separation proceeding

16 where the residence is sold or the other spouse

17 retains the residence as a principal residence.

18 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub19 title, if a credit is allowed under this section with respect

20 to the purchase of any residence, the basis of such resi21 dence shall be reduced by the amount of the credit so al22 lowed.’’.

23 (b) CONFORMING AMENDMENTS.—

24 (1) Subsection (a) of section 1016 is amended

25 by striking ‘‘and’’ at the end of paragraph (24), by
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1 striking the period at the end of paragraph (25) and

2 inserting ‘‘, and’’, and by adding at the end thereof

3 the following new paragraph:

4 ‘‘(26) in the case of a residence with respect to

5 which a credit was allowed under section 23, to the

6 extent provided in section 23(g).’’

7 (2) The table of sections for subpart A of part

8 IV of subchapter A of chapter 1 is amended by in9 serting after the item relating to section 22 the fol10 lowing new item:

‘‘Sec. 23. Purchase of principal residence by first-time homebuyer.’’

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years ending after De13 cember 31, 1994.

14 Subtitle B—Revenue Increases

15 SEC. 3101. STOCK TRANSFER EXCISE TAX.

16 (a) IN GENERAL.—Chapter 34 of the Internal Reve17 nue Code of 1986 is amended by striking the chapter

18 heading and inserting the following:

19 ‘‘CHAPTER 34—TAX ON CERTAIN

20 FINANCIAL TRANSACTIONS

‘‘Subchapter A. Tax on stock transfers.

‘‘Subchapter B. Policies issued by foreign insurers.

21 ‘‘SUBCHAPTER A—TAX ON STOCK TRANSFERS

‘‘Sec. 4301. Imposition of tax.

‘‘Sec. 4302. Collection of tax.

‘‘Sec. 4303. Taxable stock transfer.
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‘‘Sec. 4304. Taxable stock.

1 ‘‘SEC. 4301. IMPOSITION OF TAX.

2 ‘‘(a) IN GENERAL.—There is hereby imposed on each

3 taxable stock transfer a tax equal to 0.25 percent of the

4 amount realized by the transferor of the taxable stock.

5 ‘‘(b) AMOUNT REALIZED.—For purposes of sub6 section (a)—

7 ‘‘(1) IN GENERAL.—Except as otherwise pro8 vided in this subsection, the term ‘amount realized’

9 has the same meaning as when used in section 1001.

10 ‘‘(2) TRANSFERS WHICH ARE NOT SALES OR

11 EXCHANGES.—In the case of any taxable stock

12 transfer which is not a sale or exchange, the amount

13 realized is the fair market value of the taxable stock

14 involved.

15 ‘‘(3) CERTAIN ITEMS NOT TAKEN INTO AC16 COUNT.—The following amounts shall not be taken

17 into account in computing the amount realized from

18 any taxable stock transfer:

19 ‘‘(A) The tax imposed by this section.

20 ‘‘(B) Any brokerage or similar fees or com21 missions.

22 ‘‘(C) Any State, local or foreign tax im23 posed on the taxable stock transfer.
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1 ‘‘(c) TAX PAID BY TRANSFEROR.—The tax imposed

2 by subsection (a) shall be paid by the transferor of the

3 taxable stock.

4 ‘‘SEC. 4302. COLLECTION OF TAX.

5 ‘‘(a) COLLECTED BY BROKER.—Every broker who—

6 ‘‘(1) acts on behalf of the transferor in any tax7 able stock transfer, and

8 ‘‘(2) receives any payment on behalf of the

9 transferor for such transfer,

10 shall collect the amount of the tax imposed by section

11 4301 by deducting and withholding such tax from the

12 amount of any such payment. Any person required to de13 duct and withhold any tax under the preceding sentence

14 is hereby made liable for such tax and is hereby indem15 nified against the claims and demands of any person for

16 the amount of any payment so deducted and withheld.

17 ‘‘(b) PAYMENT BY TRANSFEROR WHERE NO

18 BROKER.—In any case in which there is no broker re19 quired to collect the tax under subsection (a), the trans20 feror shall pay such tax in such manner as the Secretary

21 shall by regulations prescribe.

22 ‘‘SEC. 4303. TAXABLE STOCK TRANSFER.

23 ‘‘(a) GENERAL RULE.—For purposes of this sub24 chapter, the term ‘taxable stock transfer’ means any

25 transfer of a taxable stock if such transfer is made
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1 through an established securities market in the United

2 States.

3 ‘‘(b) EXEMPTIONS.—For purposes of this subchapter,

4 the term ‘taxable stock transfer’ does not include—

5 ‘‘(1) DEATH.—Any transfer at death.

6 ‘‘(2) GIFT.—Any transfer to the extent such

7 transfer is a gift.

8 ‘‘(3) BETWEEN SPOUSES OR INCIDENT TO DI9 VORCE.—Any transfer described in section 1041(a).

10 ‘‘SEC. 4304. TAXABLE STOCK DEFINED.

11 ‘‘(a) TAXABLE STOCK.—For purposes of this sub12 chapter, the term ‘taxable stock’ means any stock in a cor13 poration or interest in a partnership which is publicly

14 traded on an established securities market in the United

15 States.

16 ‘‘SUBCHAPTER B—POLICIES ISSUED BY FOREIGN

17 INSURERS’’.

18 (b) CONFORMING AMENDMENTS.—

19 (1) The table of chapters for subtitle D of such

20 Code is amended by striking the item relating to

21 chapter 34 and inserting the following:

‘‘Chapter 34. Tax on certain financial transactions.’’

22 (2) Sections 4372(c) and 4374 of such Code

23 are each amended by striking ‘‘this chapter’’ and in24 serting ‘‘this subchapter’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to transfers after December 31,

3 1996.

4 SEC. 3102. REPEAL OF PREFERENTIAL RATE OF TAX ON

5 CAPITAL GAINS.

6 (a) IN GENERAL.— Section 1 of the Internal Revenue

7 Code of 1986 is amended by striking subsection (h).

8 (b) CONFORMING AMENDMENTS.—

9 (1) Paragraph (4) of section 691(c) of such

10 Code is amended by striking ‘‘1(h),’’.

11 (2)(A) Subparagraph (B) of section 904(b)(2)

12 of such Code is amended by striking ‘‘In the case of

13 any taxable year’’ and inserting ‘‘In the case of a

14 corporation with respect to any taxable year’’.

15 (B) Subparagraph (D) of section 904(b)(3) of

16 such Code is amended by striking ‘‘if—’’ and all

17 that follows through ‘‘(ii) in the case of a corpora18 tion,’’ and inserting ‘‘if’’.

19 (C) Subparagraph (E) of section 904(b)(3) of

20 such Code is amended to read as follows:

21 ‘‘(E) RATE DIFFERENTIAL PORTION.—The

22 rate differential portion of foreign source net

23 capital gain, net capital gain, or the excess of

24 net capital gain from sources within the United
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1 States over net capital gain, as the case may

2 be, is the same proportion of such amount as—

3 ‘‘(i) the excess of—

4 ‘‘(I) the highest rate of tax speci5 fied in section 11(b), over

6 ‘‘(II) the alternative rate of tax

7 under section 1201(a), bears to

8 ‘‘(ii) the highest rate of tax specified

9 in section 11(b).’’

10 (3) Paragraph (1) of section 1445(e) of such

11 Code is amended by striking ‘‘(or, to the extent pro12 vided in regulations, 28 percent)’’.

13 (4)(A) The second sentence of section

14 7518(g)(6)(A) of such Code is amended—

15 (i) by striking ‘‘With respect to’’ and in16 serting ‘‘In the case of a corporation, with re17 spect to’’,

18 (ii) by striking ‘‘1(h) or’’, and

19 (iii) by striking ‘‘28 percent (34 percent in

20 the case of a corporation’’ and inserting ‘‘34

21 percent’’.

22 (B) The second sentence of section

23 607(h)(6)(A) of the Merchant Marine Act, 1936 is

24 amended—
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1 (i) by striking ‘‘With respect to’’ and in2 serting ‘‘In the case of a corporation, with re3 spect to’’,

4 (ii) by striking ‘‘1(h) or’’, and

5 (iii) by striking ‘‘28 percent (34 percent in

6 the case of a corporation’’ and inserting ‘‘34

7 percent’’.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to taxable years beginning after

10 December 31, 1996.

11 SEC. 3103. CARRYOVER BASIS AT DEATH.

12 (a) GENERAL RULE.—Part II of subchapter O of

13 chapter 1 of subtitle A of the Internal Revenue Code of

14 1986 is amended by inserting after section 1021 the fol15 lowing new section:

16 ‘‘SEC. 1022. CARRYOVER BASIS FOR CERTAIN PROPERTY

17 ACQUIRED FROM A DECEDENT.

18 ‘‘(a) CARRYOVER BASIS.—

19 ‘‘(1) IN GENERAL.—Except as otherwise pro20 vided in this section, the basis of carryover basis

21 property in the hands of a person acquiring such

22 property from a decedent is—

23 ‘‘(A) its initial basis, increased by

24 ‘‘(B) its section 1022 adjustment deter25 mined under subsection (c).
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1 ‘‘(2) INITIAL BASIS.—The initial basis of carry2 over basis property is its adjusted basis for purposes

3 of determining gain immediately before the death of

4 the decedent, adjusted as provided in subsection (d).

5 ‘‘(3) FAIR MARKET VALUE RULE FOR ESTATES

6 HAVING $600,000 OR LESS OF PROPERTY DESCRIBED

7 IN SECTION 1022(b).—

8 ‘‘(A) IN GENERAL.—In the case of any de9 cedent dying after December 31, 1996, if the

10 aggregate fair market value of the property

11 which (but for this paragraph) would be carry12 over basis property is $600,000 or less, then—

13 ‘‘(i) this section (other than this para14 graph) shall not apply to such property,

15 and

16 ‘‘(ii) the basis of such property in the

17 hands of the person acquiring it shall be

18 determined under section 1014.

19 ‘‘(B) ELECTION WITH RESPECT TO TAN20 GIBLE PERSONAL PROPERTY DISREGARDED.—

21 For purposes of subparagraph (A), the deter22 mination of what would be carryover basis

23 property shall be made without regard to any

24 election under subsection (b)(3).

25 ‘‘(4) ELECTION OF MARK-TO-MARKET.—
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1 ‘‘(A) IN GENERAL.—If the executor elects

2 this paragraph with respect to all property

3 which (but for this paragraph) would be carry4 over basis property, then—

5 ‘‘(i) this section (other than this para6 graph) shall not apply to such property,

7 and

8 ‘‘(ii) the basis of such property in the

9 hands of the person acquiring it shall be

10 determined under section 1014.

11 ‘‘(B) EFFECT OF ELECTION.—If an elec12 tion under this paragraph applies to any prop13 erty, such property shall be treated as sold (for

14 its value determined for purposes of chapter

15 11) on the date of the decedent’s death (and

16 any gain or loss shall be treated as received or

17 accrued on such date).

18 ‘‘(C) DISTRIBUTIONS IN REDEMPTION OF

19 STOCK TO PAY TAX.—Section 303 shall be ap20 plied—

21 ‘‘(i) by treating subsection (a)(1)

22 thereof as including a reference to the tax

23 imposed by this chapter by reason of the

24 election under this paragraph, and
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1 ‘‘(ii) by determining the period of dis2 tribution with respect to such tax without

3 regard to subparagraph (C) of section

4 303(b)(1) and as if subparagraphs (A) and

5 (B) thereof referred only to the tax im6 posed by this chapter.

7 ‘‘(D) ELECTION.—An election under this

8 paragraph shall be made by the executor not

9 later than the date prescribed for filing the re10 turn of the tax imposed by chapter 11 (includ11 ing extensions thereof), and shall be made on

12 such return. Such an election, once made, shall

13 be irrevocable.

14 ‘‘(b) CARRYOVER BASIS PROPERTY DEFINED.—

15 ‘‘(1) IN GENERAL.—For purposes of this sec16 tion, the term ‘carryover basis property’ means any

17 property—

18 ‘‘(A) which is acquired from or passed

19 from a decedent who died after December 31,

20 1996, and

21 ‘‘(B) which is not excluded pursuant to

22 paragraph (2) or (3).

23 The property taken into account under subpara24 graph (A) shall be determined under section 1014(b)
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1 without regard to subparagraph (A) of the last sen2 tence of paragraph (9) thereof.

3 ‘‘(2) CERTAIN PROPERTY NOT CARRYOVER

4 BASIS PROPERTY.—The term ‘carryover basis prop5 erty’ does not include—

6 ‘‘(A) property which—

7 ‘‘(i) was acquired from the decedent

8 before the decedent’s death, and

9 ‘‘(ii) was sold, exchanged, or otherwise

10 disposed of before the decedent’s death by

11 the person so acquiring it,

12 ‘‘(B) any item of gross income in respect

13 of a decedent described in section 691;

14 ‘‘(C) property described in section 2042

15 (relating to proceeds of life insurance); and

16 ‘‘(D) property described in section

17 1014(b)(5).

18 ‘‘(3) $25,000 EXCLUSION FOR TANGIBLE PER19 SONAL PROPERTY.—

20 ‘‘(A) EXCLUSION.—The term ‘carryover

21 basis property’ does not include any tangible

22 personal property—

23 ‘‘(i) which, in the hands of the dece24 dent, was a capital asset, and
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1 ‘‘(ii) with respect to which the execu2 tor has made an election under this para3 graph.

4 ‘‘(B) LIMITATION.—The fair market value

5 of all assets designated under this subsection

6 with respect to any decedent shall not exceed

7 $25,000.

8 ‘‘(C) ELECTION.—An election under this

9 paragraph with respect to any asset shall be

10 made by the executor not later than the date

11 prescribed for filing the return of the tax im12 posed by chapter 11 (including extensions

13 thereof), and shall be made on such return.

14 ‘‘(c) SECTION 1022 ADJUSTMENT.—

15 ‘‘(1) IN GENERAL.—The section 1022 adjust16 ment for any carryover basis property is the sum

17 of—

18 ‘‘(A) the minimum basis adjustment for

19 such property, and

20 ‘‘(B) the death tax adjustment for such

21 property.

22 ‘‘(2) MINIMUM BASIS ADJUSTMENT.—

23 ‘‘(A) IN GENERAL.—The minimum basis

24 adjustment for any carryover basis property is

25 the portion of the aggregate minimum basis ad-
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1 justment which is allocated to the property pur2 suant to this section.

3 ‘‘(B) AGGREGATE MINIMUM BASIS ADJUST4 MENT.—In the case of any estate, the aggre5 gate minimum basis adjustment is the amount

6 (if any) by which—

7 ‘‘(i) $600,000, exceeds

8 ‘‘(ii) the aggregate of the initial bases

9 of all carryover basis property.

10 ‘‘(3) DEATH TAX ADJUSTMENT.—

11 ‘‘(A) IN GENERAL.—The death tax adjust12 ment for any carryover basis property is the

13 portion of the aggregate death tax adjustment

14 which is allocated to the property pursuant to

15 this section.

16 ‘‘(B) LIMITATION.—The death tax adjust17 ment for any property shall not exceed—

18 ‘‘(i) the net appreciation in such prop19 erty, multiplied by

20 ‘‘(ii) the Federal marginal estate tax

21 rate.

22 ‘‘(C) NET APPRECIATION.—For purposes

23 of this subsection, the net appreciation in value

24 of any property is the amount by which—
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1 ‘‘(i) the fair market value of such

2 property, exceeds

3 ‘‘(ii) the initial basis of such property

4 increased by the minimum basis adjust5 ment of such property.

6 ‘‘(4) AGGREGATE DEATH TAX ADJUSTMENT.—

7 In the case of any estate—

8 ‘‘(A) IN GENERAL.—The aggregate death

9 tax adjustment is the product of—

10 ‘‘(i) the aggregate net appreciation of

11 all carryover basis properties which have

12 net appreciation, and

13 ‘‘(ii) the Federal marginal estate tax

14 rate.

15 ‘‘(B) LIMITATION.—The amount taken

16 into account under subparagraph (A)(i) shall

17 not exceed the greater of—

18 ‘‘(i) $250,000, or

19 ‘‘(ii) the taxable estate.

20 ‘‘(C) FEDERAL MARGINAL ESTATE TAX

21 RATE.—The term ‘Federal marginal estate tax

22 rate’ means the highest rate in the rate sched23 ule set forth in section 2001(c)—
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1 ‘‘(i) which is used in determining the

2 tentative tax under section 2001(b)(1) with

3 respect to the estate of the decedent, and

4 ‘‘(ii) the amount subject to which is at

5 least $50,000.

6 In no event shall the Federal marginal estate

7 tax rate be less than 30 percent.

8 ‘‘(5) ALLOCATION RULES.—

9 ‘‘(A) IN GENERAL.—The executor shall al10 locate the adjustments under this subsection

11 among the carryover basis properties on the re12 turn of the tax imposed by chapter 11.

13 ‘‘(B) CHANGES IN ALLOCATION.—Any allo14 cation made pursuant to subparagraph (A) may

15 be changed at any time before the close of the

16 30th day after the initial basis finality date.

17 The allocation in effect at the close of such

18 30th day may be changed only with the consent

19 of the Secretary.

20 ‘‘(C) INITIAL BASIS FINALITY DATE.—For

21 purposes of this paragraph, the term ‘initial

22 basis finality date’ means the last day on which

23 the initial basis of property may be changed in

24 an administrative or judicial proceeding re25 ferred to in section 7479.
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1 ‘‘(d) FRESH START ADJUSTMENT.—

2 ‘‘(1) MARKETABLE SECURITIES.—If—

3 ‘‘(A) the adjusted basis immediately before

4 the death of the decedent of any property which

5 is carryover basis property reflects the adjusted

6 basis of any marketable security on December

7 31, 1996, and

8 ‘‘(B) the fair market value of such security

9 on December 31, 1996, exceeded its adjusted

10 basis on such date,

11 then the adjusted basis of such property shall be in12 creased to reflect the excess referred to in subpara13 graph (B).

14 ‘‘(2) OTHER PROPERTY.—

15 ‘‘(A) IN GENERAL.—For purposes of this

16 section, if the holding period for any property

17 other than a marketable security includes De18 cember 31, 1996, the adjusted basis of such

19 property immediately before the death of the

20 decedent shall be treated as being not less than

21 the greatest of the amounts determined under

22 subparagraph (B).

23 ‘‘(B) DETERMINATION USING DISCOUNT

24 BACK METHOD.—The amount determined under

25 this subparagraph for any property is—
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1 ‘‘(i) the fair market value of such

2 property, divided by

3 ‘‘(ii) 1.005 to the ‘nth’ power where

4 ‘n’ equals the number of full calendar

5 months which have elapsed between De6 cember 31, 1996, and the date of the dece7 dent’s death.

8 Except as provided in subparagraph (C), the

9 amount determined under this subparagraph

10 shall not be less than 25 percent of the fair

11 market value of the property.

12 ‘‘(C) SUBSTANTIAL IMPROVEMENT OR

13 OTHER CHANGE AFTER 1992.—Under regula14 tions prescribed by the Secretary, proper ad15 justment shall be made in the adjustment under

16 subparagraph (B) or (C) for any property with

17 respect to which there has been a substantial

18 improvement or other change after December

19 31, 1996.

20 ‘‘(3) ONLY ONE FRESH START.—There shall be

21 no increase in basis under this subsection by reason

22 of the death of any decedent if the adjusted basis of

23 the property in the hands of such decedent reflects

24 the adjusted basis of property which was carryover

25 basis property with respect to a prior decedent.
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1 ‘‘(4) CERTAIN PREFERRED STOCK.—

2 ‘‘(A) IN GENERAL.—For purposes of this

3 subsection, preferred stock which was issued

4 and outstanding on December 31, 1996, and

5 which, but for this subparagraph, would not be

6 a marketable security shall be treated as a mar7 ketable security the fair market value of which,

8 on December 31, 1996, is its stated redemption

9 price on such date excluding any dividends in

10 arrears.

11 ‘‘(B) PREFERRED STOCK DEFINED.—For

12 purposes of subparagraph (A), the term ‘pre13 ferred stock’ means any stock which—

14 ‘‘(i) is fixed and preferred as to divi15 dends and does not participate in corporate

16 growth to any significant extent, and

17 ‘‘(ii) is not convertible into any other

18 class of stock.

19 ‘‘(5) CERTAIN OTHER PROPERTY.—In the case

20 of any property which, as of December 31, 1996,

21 had a value which was readily ascertainable (whether

22 because of a buy-sell agreement, a redemption value,

23 or otherwise) by a method other than appraisal, the

24 Secretary may by regulations provide rules similar to

25 the rules provided by paragraph (1).
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1 ‘‘(6) DEFINITIONS.—For purposes of this sub2 section—

3 ‘‘(A) MARKETABLE SECURITY.—Except as

4 provided in paragraphs (4) and (5), the term

5 ‘marketable security’ means any security for

6 which, as of December 1996, there was a mar7 ket on a stock exchange, in an over-the-counter

8 market, or otherwise.

9 ‘‘(B) HOLDING PERIOD.—The term ‘hold10 ing period’ means, with respect to any carryover

11 basis property, the period during which the de12 cedent (or, if any other person held such prop13 erty immediately before the death of the dece14 dent, such other person) held such property as

15 determined under section 1223; except that

16 such period shall end on the date of the dece17 dent’s death.

18 ‘‘(e) SPECIAL RULES AND DEFINITIONS.—For pur19 poses of this section—

20 ‘‘(1) TREATMENT OF ITEMS ON A CLASS

21 BASIS.—Under regulations prescribed by the Sec22 retary, the holding periods, bases, and fair market

23 value of similar items falling within the same class

24 of property may be determined on a class basis rath25 er than on an individual item basis.
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1 ‘‘(2) IMPROVEMENTS TO PRINCIPAL RESI2 DENCE.—

3 ‘‘(A) IN GENERAL.—If—

4 ‘‘(i) property was used by the dece5 dent as his principal residence, and

6 ‘‘(ii) the decedent’s holding period for

7 such property began after December 31,

8 1996,

9 then in determining the decedent’s adjusted

10 basis for such property immediately before the

11 death of the decedent the improvements to such

12 residence for each calendar year during which

13 the decedent held it and used it as his principal

14 residence shall be deemed to be not less than

15 $250.

16 ‘‘(B) SPECIAL RULES.—For purposes of

17 subparagraph (A):

18 ‘‘(i) The term ‘principal residence’ has

19 the same meaning as when used in section

20 1034.

21 ‘‘(ii) The period taken into account

22 shall include any period during the dece23 dent’s holding period for this residence

24 during which the decedent held a prior

25 principal residence.
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1 ‘‘(iii) Holding and use by the decedent

2 for more than 182 days in a calendar year

3 shall be treated as holding and use by the

4 decedent throughout the calendar year.

5 ‘‘(iv) Holding and use by the spouse

6 of the decedent shall be treated as holding

7 and use by the decedent.

8 ‘‘(3) DECEDENT’S BASIS UNKNOWN.—If the

9 facts necessary to determine the basis (unadjusted)

10 of carryover basis property immediately before the

11 death of the decedent are unknown and cannot rea12 sonably be ascertained, such basis shall be treated as

13 being the fair market value of such property as of

14 the date (or approximate date) at which such prop15 erty was acquired by the decedent or by the last pre16 ceding owner in whose hands it did not have a basis

17 determined in whole or in part by reference to its

18 basis in the hands of a prior holder.

19 ‘‘(4) PERSONAL AND HOUSEHOLD EFFECTS.—

20 ‘‘(A) LOSS.—In the case of any carryover

21 basis property which, in the hands of the dece22 dent, was a personal or household effect, for

23 purposes of determining loss the basis of such

24 property in the hands of the person acquiring
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1 such property from the decedent shall not ex2 ceed its fair market value.

3 ‘‘(B) DETERMINATION OF MINIMUM

4 BASIS.—In determining under subsection

5 (c)(2)(B) the aggregate of the initial bases of

6 all carryover basis property, the basis of any

7 property which is a personal or household effect

8 shall be treated as not greater than the fair

9 market value of such property.

10 ‘‘(5) FAIR MARKET VALUE.—For purposes of

11 this section, when not otherwise distinctly expressed,

12 the term ‘fair market value’ means value as deter13 mined under chapter 11 (without regard to whether

14 there is a mortgage on, or indebtedness in respect

15 of, the property).

16 ‘‘(6) FAIR MARKET VALUE LIMITATION.—The

17 adjustments under subsections (c) and (d) shall not

18 increase the basis of property above its fair market

19 value.

20 ‘‘(7) PROPERTY PASSING FROM THE DECE21 DENT.—For purposes of this section, property pass22 ing from the decedent shall be treated as property

23 acquired from the decedent.

24 ‘‘(8) NONRESIDENTS NOT CITIZENS.—In the

25 case of a decedent who was (at the time of his
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1 death) a nonresident not a citizen of the United

2 States—

3 ‘‘(A) subsections (a)(3) and (b)(4) shall

4 not apply,

5 ‘‘(B) there shall be no section 1022 adjust6 ment other than the death tax adjustment, and

7 ‘‘(C) in applying subsection (c)(6)(C)—

8 ‘‘(i) the reference to section 2001(c)

9 shall be treated as referring to section

10 2101(d),

11 ‘‘(ii) the reference to section

12 2001(b)(1) shall be treated as referring to

13 section 2101(b)(1), and

14 ‘‘(iii) 6 percent shall be substituted

15 for 30 percent.

16 ‘‘(f) SPECIAL RULE WHERE PROPERTY SOLD TO

17 FUND DEATH TAXES.—

18 ‘‘(1) IN GENERAL.—If the executor elects the

19 benefits of this subsection, subsection (c)(5)(B) shall

20 not apply to carryover basis property—

21 ‘‘(A) which is a capital asset or property

22 described in section 1231 in the hands of the

23 estate or the person acquiring the property

24 from the decedent, and
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1 ‘‘(B) is sold or exchanged by the estate or

2 such person on or before the 30th day after the

3 initial basis finality date.

4 ‘‘(2) LIMITATION.—The fair market value of all

5 assets to which the election under this subsection

6 applies shall not exceed the sum of the items set

7 forth in paragraphs (1) and (2) of section 303(a).

8 ‘‘(3) ELECTION REQUIREMENTS.—An election

9 under this subsection may be made only:

10 ‘‘(A) TIME.—On or before the 30th day

11 after the initial basis finality date.

12 ‘‘(B) IF CLOSELY HELD INTEREST.—If the

13 executor may make an election under section

14 6166.

15 ‘‘(g) REGULATIONS.—The Secretary shall prescribe

16 such regulations as may be necessary to carry out the pur17 poses of this section.’’

18 (b) TERMINATION OF APPLICATION OF SECTION

19 1014, ETC.—

20 (1) Section 1014 (relating to basis of property

21 acquired from a decedent) is amended by adding at

22 the end thereof the following new subsection:

23 ‘‘(f) DECEDENTS DYING AFTER DECEMBER 31,

24 1996.—In the case of a decedent dying after December
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1 31, 1996, this section shall not apply to property for which

2 a carryover basis is provided by section 1022.’’

3 (2) Subsection (a) of section 1016 (relating to

4 adjustments to basis) is amended by striking ‘‘and’’

5 at the end of paragraph (23), by striking the period

6 at the end of paragraph (24) and inserting ‘‘; and’’,

7 and by adding at the end thereof the following new

8 paragraph:

9 ‘‘(25) to the extent provided in section 1022

10 (relating to carryover basis for certain property ac11 quired from a decedent dying after December 31,

12 1996).’’

13 (c) NONRECOGNITION OF GAIN, ETC. WHERE CER14 TAIN APPRECIATED CARRYOVER BASIS PROPERTY IS

15 USED IN SATISFACTION OF A PECUNIARY BEQUEST.—

16 (1) NONRECOGNITION OF GAIN.—

17 (A) IN GENERAL.—Part III of subchapter

18 O of chapter 1 (relating to common nontaxable

19 exchanges) is amended by adding at the end

20 thereof the following new section:

21 ‘‘SEC. 1043. USE OF CERTAIN APPRECIATED CARRYOVER

22 BASIS PROPERTY TO SATISFY PECUNIARY

23 BEQUEST.

24 ‘‘(a) GENERAL RULE.—If the executor of the estate

25 of any decedent satisfies the right of any person to receive
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1 a pecuniary bequest with appreciated carryover basis prop2 erty, then gain on such exchange shall be recognized to

3 the estate only to the extent that, on the date of such ex4 change, the fair market value of such property exceeds the

5 value of such property for purposes of chapter 11.

6 ‘‘(b) SIMILAR RULE FOR CERTAIN TRUSTS.—To the

7 extent provided in regulations prescribed by the Secretary,

8 a rule similar to the rule provided in subsection (a) shall

9 apply where—

10 ‘‘(1) by reason of the death of the decedent, a

11 person has a right to receive from a trust a specific

12 dollar amount which is the equivalent of a pecuniary

13 bequest, and

14 ‘‘(2) the trustee of the trust satisfies such right

15 with carryover basis property to which section 1022

16 applies.

17 ‘‘(c) BASIS OF PROPERTY ACQUIRED IN EXCHANGE

18 DESCRIBED IN SUBSECTION (a) OR (b).—The basis of

19 property acquired in an exchange with respect to which

20 gain realized is not recognized by reason of subsection (a)

21 or (b) shall be the basis of such property immediately be22 fore the exchange, increased by the amount of the gain

23 recognized to the estate or trust on the exchange.’’
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1 (B) CLERICAL AMENDMENT.—The table of

2 sections for such part III is amended by adding

3 at the end thereof the following new item:

‘‘Sec. 1043. Use of certain appreciated carryover basis property

to satisfy pecuniary bequest.’’

4 (2) LIMITATION ON RECAPTURE RULES IN CASE

5 OF CARRYOVER BASIS PROPERTY TRANSFERRED TO

6 SATISFY PECUNIARY BEQUEST.—

7 (A) AMENDMENT OF SECTION 1245.—Sub8 section (b) of section 1245 (relating to excep9 tions and limitations) is amended by adding at

10 the end thereof the following new paragraph:

11 ‘‘(9) TRANSFERS OF CARRYOVER BASIS PROP12 ERTY TO SATISFY PECUNIARY BEQUEST.—If prop13 erty is disposed of and gain (determined without re14 gard to this section) is not recognized in whole or

15 in part under section 1043, then the amount of gain

16 taken into account by the transferor under sub17 section (a)(1) shall not exceed the amount of gain

18 recognized to the transferor on such disposition (de19 termined without regard to this section).’’

20 (B) AMENDMENT TO SECTION 1250.—Sub21 section (d) of section 1250 (relating to excep22 tions and limitations) is amended by adding at

23 the end thereof the following new paragraph:
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1 ‘‘(11) TRANSFERS OF CARRYOVER BASIS PROP2 ERTY TO SATISFY PECUNIARY BEQUEST.—If prop3 erty is disposed of and gain (determined without re4 gard to this section) is not recognized in whole or

5 in part under section 1043, then the amount of gain

6 taken into account by the transferor under sub7 section (a) shall not exceed the amount of gain rec8 ognized to the transferor on such disposition (deter9 mined without regard to this section).’’

10 (d) PROCEDURE FOR BINDING DETERMINATION OF

11 INITIAL BASIS.—

12 (1) IN GENERAL.—Part IV of subchapter C of

13 chapter 76 (relating to declaratory judgments) is

14 amended by adding at the end thereof the following

15 new section:

16 ‘‘SEC. 7479. PROCEDURE FOR BINDING DETERMINATION

17 OF INITIAL BASIS OF CARRYOVER BASIS

18 PROPERTY.

19 ‘‘(a) ADMINISTRATIVE AUDIT.—

20 ‘‘(1) DESIGNATION BY EXECUTOR.—An execu21 tor may request the Secretary to audit the initial

22 basis of any carryover basis property which is shown

23 on the return of the tax imposed by chapter 11. Any

24 such request shall be made on such return.
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1 ‘‘(2) AUTHORITY OF THE SECRETARY.—For

2 purposes of examining the correctness of the initial

3 basis of any property with respect to which an ex4 ecutor has made a request under paragraph (1), the

5 Secretary shall have the same authority as if he

6 were determining the liability of any person for a tax

7 imposed by this title.

8 ‘‘(b) JUDICIAL REVIEW.—

9 ‘‘(1) BRINGING OF ACTION.—If the executor

10 and the Secretary have not entered into an agree11 ment described in subsection (c)(2) with respect to

12 any property for which a request has been made

13 under subsection (a)(1), the executor may bring an

14 action in the Tax Court with respect to such prop15 erty.

16 ‘‘(2) DECLARATION BY TAX COURT.—Upon the

17 filing of an appropriate pleading in an action

18 brought under paragraph (1), the Tax Court may

19 make a declaration of the initial basis of the prop20 erty with respect to which such an action is brought.

21 Any such declaration shall be final and conclusive

22 and shall not be reviewed by any other court.

23 ‘‘(3) TIME FOR BRINGING ACTION.—No action

24 may be brought under this subsection with respect

25 to any property unless the pleading is filed—
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1 ‘‘(A) after the expiration of 1 year after

2 the date on which the executor made a request

3 under subsection (a)(1) with respect to such

4 property, and

5 ‘‘(B) before the 91st day after the later

6 of—

7 ‘‘(i) the day on which the Secretary

8 sends by certified or registered mail a noti9 fication of his disagreement with the initial

10 basis of the property shown on the return

11 of the tax imposed by chapter 11, or

12 ‘‘(ii) the expiration of the 1-year pe13 riod referred to in subparagraph (A).

14 ‘‘(c) BINDING EFFECT OF DETERMINATIONS.—

15 ‘‘(1) NO NOTICE FROM SECRETARY.—If—

16 ‘‘(A) an executor makes a request under

17 subsection (a)(1) with respect to the initial

18 basis of any property, and

19 ‘‘(B) before the date 3 years after the day

20 on which such request is made, the Secretary

21 does not send to the executor by certified or

22 registered mail notice of his disagreement with

23 the initial basis of such property shown on the

24 return of the tax imposed by chapter 11,
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1 then the initial basis so shown shall be binding and

2 conclusive on the Secretary and on any person whose

3 basis in such property is affected by such initial

4 basis unless any such person establishes a different

5 initial basis to the satisfaction of the Secretary.

6 ‘‘(2) AGREEMENT BETWEEN SECRETARY AND

7 EXECUTOR.—If the executor and the Secretary sign

8 a written agreement as to the initial basis of any

9 property with respect to which the executor made a

10 request under subsection (a)(1), such agreement

11 shall be binding and conclusive on the Secretary and

12 on any person whose basis in such property is af13 fected by the initial basis in the same manner as if

14 such agreement were a closing agreement under sec15 tion 7121 between the Secretary and such person.

16 ‘‘(3) TAX COURT DECISION BINDING ON

17 HEIRS.—Any declaration of the initial basis of any

18 property made by the Tax Court which has become

19 final shall also be binding on any person whose basis

20 in the property is affected by the initial basis.

21 ‘‘(d) INTERVENTION.—Any person whose basis in any

22 property is affected by the initial basis of any property

23 shall be allowed to intervene in any administrative or judi24 cial proceeding under this section with respect to such

25 property.
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1 ‘‘(e) DEFINITIONS.—

2 ‘‘(1) IN GENERAL.—Terms used in this section

3 which are also used in section 1022 shall have the

4 meanings as when used in section 1022.

5 ‘‘(2) ESTATES NOT REQUIRED TO FILE ESTATE

6 TAX RETURNS.—In the case of any estate with re7 spect to which a return of the tax imposed by chap8 ter 11 is not required, any reference in this section

9 or in section 1022 to such a return shall be treated

10 as a reference to a return required under section

11 6039F(a).’’

12 (2) COMMISSIONERS.—Subsection (c) of section

13 7456 (relating to Tax Court commissioners) is

14 amended by striking out ‘‘and 7478’’ and inserting

15 in lieu thereof ‘‘7478, and 7479’’.

16 (e) INFORMATION RETURNS; ASSESSABLE PENALTY

17 FOR NEGLIGENT OR FRAUDULENT OVERSTATEMENT OF

18 INITIAL BASIS; PENALTIES FOR FAILURE TO FURNISH

19 INFORMATION.—

20 (1) INFORMATION RETURNS.—Subpart A of

21 part III of subchapter A of chapter 61 (relating to

22 information concerning persons subject to special

23 provisions) is amended by adding after section

24 6039E the following new section:
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1 ‘‘SEC. 6039F. INFORMATION REGARDING CARRYOVER BASIS

2 PROPERTY ACQUIRED FROM A DECEDENT.

3 ‘‘(a) IN GENERAL.—Every executor (as defined in

4 section 2203) shall furnish the Secretary such information

5 with respect to carryover basis property to which section

6 1022 applies as the Secretary may by regulations pre7 scribe.

8 ‘‘(b) STATEMENTS TO BE FURNISHED TO PERSONS

9 WHO ACQUIRE PROPERTY FROM A DECEDENT.—Every

10 executor who is required to furnish information under sub11 section (a) shall furnish in writing to each person acquir12 ing an item of such property from the decedent (or to

13 whom the item passes from the decedent) the adjusted

14 basis of such item.’’

15 (2) PENALTIES.—Part I of subchapter B of

16 chapter 68 (relating to assessable penalties) is

17 amended by adding at the end thereof the following

18 new section:

19 ‘‘SEC. 6714. FAILURE TO FILE INFORMATION WITH RESPECT

20 TO CARRYOVER BASIS PROPERTY.

21 ‘‘(a) INFORMATION REQUIRED TO BE FURNISHED

22 TO THE SECRETARY.—Any executor who fails to furnish

23 information required under section 6039F(a) on the date

24 prescribed therefor (determined with regard to any exten25 sion of time for filing) shall, if such failure is due to neg26 ligence or intentional disregard of rules and regulations,
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1 pay a penalty of $100 for each such failure, but the total

2 amount imposed for all such failures shall not exceed

3 $5,000.

4 ‘‘(b) INFORMATION REQUIRED TO BE FURNISHED

5 TO BENEFICIARIES.—Any executor who fails to furnish in

6 writing to each person described in section 6039F(b) the

7 information required under such section shall, if such fail8 ure is due to negligence or intentional disregard of rules

9 and regulations, pay a penalty of $50 for each such fail10 ure, but the total amount imposed for all such failures

11 shall not exceed $2,500.

12 ‘‘(c) NEGLIGENT OR FRAUDULENT OVERSTATEMENT

13 OF INITIAL BASIS.—

14 ‘‘(1) NEGLIGENT OVERSTATEMENT.—If any

15 part of an initial basis overstatement is due to neg16 ligence or intentional disregard of rules and regula17 tions (but without intent to defraud) by the execu18 tor, such executor shall pay a penalty equal to 10

19 percent of such overstatement.

20 ‘‘(2) FRAUDULENT OVERSTATEMENT.—If any

21 part of an initial basis overstatement is due to fraud

22 by the executor, such executor shall pay a penalty

23 equal to 30 percent of such overstatement.
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1 ‘‘(3) INITIAL BASIS OVERSTATEMENT DE2 FINED.—For purposes of this subsection, the term

3 ‘initial basis overstatement’ means the excess of—

4 ‘‘(A) the initial basis of any carryover basis

5 property shown on the return of the tax im6 posed by chapter 11 (or, if no such return is re7 quired, a return required under section

8 6039F(a)), over

9 ‘‘(B) the amount determined to be the ini10 tial basis of such property.

11 ‘‘(d) DEFICIENCY PROCEDURES NOT TO APPLY.—

12 Subchapter B of chapter 63 (relating to deficiency proce13 dures for income, estate, gift, and certain excise taxes)

14 shall not apply in respect of the assessment or collection

15 of any penalty imposed by this section.’’

16 (3) CLERICAL AMENDMENTS.—

17 (A) The table of sections for subpart A of

18 part III of subchapter A of chapter 61 is

19 amended by adding after the item relating to

20 section 6039E the following new item:

‘‘Sec. 6039F. Information regarding carryover basis property acquired from a decedent.’’

21 (B) The table of sections for part I of sub22 chapter B of chapter 68 is amended by adding

23 at the end thereof the following new item:

‘‘Sec. 6714. Failure to file information with respect to carryover

basis property.’’
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1 (f) $125,000 EXCLUSION MADE AVAILABLE TO

2 SPOUSE OF DECEDENT IN CERTAIN CASES.—Paragraph

3 (2) of section 121(d) (relating to property of deceased

4 spouse) is amended by striking the period at the end

5 thereof and inserting in lieu thereof ‘‘, and, if the deceased

6 spouse attained age 55 before the date of his death, then

7 such individual shall be treated as satisfying the age re8 quirement of subsection (a)(1) with respect to such prop9 erty.’’

10 (g) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to estates of decedents dying after

12 December 31, 1996.

13 SEC. 3104. MISCELLANEOUS AMENDMENTS RELATED TO

14 CARRYOVER BASIS.

15 (a) ALLOWANCE OF CAPITAL LOSS CARRYOVERS TO

16 AN ESTATE.—Section 642 (relating to special rules for

17 credits and deductions for estates and trusts) is amended

18 by redesignating subsection (j) as (k) and by inserting

19 after subsection (i) the following new subsection:

20 ‘‘(j) UNUSED CAPITAL LOSS CARRYOVER TRANS21 FERRED TO ESTATE.—In the case of a decedent with re22 spect to whom section 1022 (relating to carryover basis

23 property) applies, if, but for this subsection, part or all

24 of any capital loss carryover under section 1212(b) for the

25 decedent’s last taxable year would be lost, then, in accord-
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1 ance with regulations prescribed by the Secretary, the es2 tate shall be allowed such carryover under section 1212(b)

3 beginning with the estate’s first taxable year.’’

4 (b) CAPITAL GAIN TREATMENT FOR INHERITED ART

5 WORK OR SIMILAR PROPERTY.—

6 (1) IN GENERAL.—Subparagraph (C) of section

7 1221(3) (defining capital asset) is amended by in8 serting ‘‘(other than by reason of section 1022)’’

9 after ‘‘is determined’’.

10 (2) COORDINATION WITH SECTION 170.—Para11 graph (1) of section 170(e) is amended by adding at

12 the end thereof the following new sentence: ‘‘For

13 purposes of this paragraph, the determination of

14 whether property is a capital asset shall be made

15 without regard to the exception contained in section

16 1221(3)(C) for basis determined under section

17 1022.’’

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to the estates of decedents dying

20 after December 31, 1996.

21 TITLE IV—APPROPRIATIONS

22 SEC. 4001. APPROPRIATIONS.

23 There is hereby appropriated for any fiscal year, out

24 of any money in the Treasury not otherwise appropriated,

25 an amount equal to each amount authorized by this Act
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1 for such fiscal year. Any amount appropriated under the

2 preceding sentence for any fiscal year shall be expended

3 only for the purpose for which authorized and shall remain

4 available until the close of the second following fiscal year.

5 SEC. 4002. DESIGNATION AS EMERGENCY REQUIREMENT.

6 The entire amount appropriated under this Act is

7 designated by Congress as an emergency requirement pur8 suant to section 251(b)(2)(D)(i) of the Balanced Budget

9 and Emergency Deficit Control Act of 1985.

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